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World Economic and Financial Surveys

Regional Economic Outlook:
Sub-Saharan Africa

Maintaining Growth in an Uncertain World

October 2012
©2012 International Monetary Fund

Economic conditions in sub-Saharan Africa have remained generally robust despite a sluggish global economy. The near-term outlook for the region remains broadly positive, and growth is projected at 5¼ percent a year in 2012–13. Most low-income countries are projected to continue to grow strongly, supported by domestic demand, including from investment. The outlook is less favorable for many of the middle-income countries, especially South Africa, that are more closely linked to European markets and thus experience a more noticeable drag from the external environment. The main risks to the outlook are an intensification of financial stresses in the euro zone and a sharp fiscal adjustment in the US–the so called fiscal cliff.


Contents
Abbreviations
Acknowledgements
In Brief
1.  Maintaining Growth in an Uncertain World
  Introduction and Summary
  Resilience in the Face of an Uncertain Environment
  Risk Scenario Analysis
  Is There Still Room for Policy Action if Needed?
  Policy Recommendations
  Concluding Remarks
2.  Nigeria and South Africa: Spillovers to the Rest of Sub-Saharan Africa
  Introduction and Summary
  South Africa’s Impact on Sub-Saharan Africa
  Nigeria’s Impact on its Neighbors
  Concluding Remarks
3.  Structural Transformation in Sub-Saharan Africa
  Introduction and Summary
  Stylized Facts
  Sectoral Perspectives
  Some Impediments to Structural Transformation
  Conclusions and Future Prospects
Statistical Appendix
References
Publications of the IMF African Department, 2009–12
 
Boxes
1.1 South Sudan: Newest IMF Member
1.2 Debt Dynamics in the Baseline over the Medium-Term
1.3 Global Food Prices and Food Security in Sub-Saharan Africa
1.4 Energy Subsidies in Sub-Saharan Africa: Costly, Untargeted, and Inefficient
2.1 The Role of Nigeria and South Africa in the Network of Sub-Saharan African Merchandise Trade
2.2 Linkages among Sub-Saharan Africa Stock Exchanges
2.3 Spillovers within the Southern Africa Customs Union
2.4 Energy Linkages between Nigeria and Surrounding Countries
2.5 Informal Trade between Benin and Nigeria
3.1 Structural Transformation in Asia
3.2 Formal and Informal Employment
 
Tables
1.1 Sub-Saharan Africa: Real GDP Growth
1.2 Sub-Saharan Africa: Other Macroeconomic Indicators
1.3 Sub-Saharan Africa: Financial Soundness Indicators in 2011, Selected Countries
1.4 Sub-Saharan Africa: Indicators for Fiscal Policy Room
2.1 Sub-Saharan Africa: Key Nonfinancial South African Firms Operating in the Region
2.2 Sub-Saharan Africa: Key South Africa-based Financial Groups Operating in the Region
2.3 Sub-Saharan Africa: Key Linkages with South Africa, 2010
2.4 Main Recipients of Remittances from Nigeria
2.5 Nigeria and Neighboring Countries’ GDP
2.6 Nigeria and Neighboring Countries’ CPI
3.1 Structural Transformation in Sub-Saharan African Countries: Productivity Growth and Change in Agricultural Output Shares, 1995–2010
3.2 Structural Transformation in Sub-Saharan African Countries: Output Shares of Ariculture, Mining, Manufacturing, Construction, and the Tertiary Sector, 1995–2010
3.3 Education Characteristics 2010
3.4 Structural Impediments
 
Figures
1.1 Sub-Saharan Africa: Food and Nonfood Inflation
1.2 Sub-Saharan Africa: Nominal Credit to the Private Sector
1.3 Sub-Saharan Africa: Overall Fiscal Balance, 2004–13
1.4 Sub-Saharan Africa: Government Debt Ratios, 2000–12
1.5 Sub-Saharan Africa: Exports and the Current Account by Regional Groups
1.6 Sub-Saharan Africa: Financial Soundness Indicators
1.7 Selected Regions: Real GDP Growth, 2008–13
1.8 Selected Regions, Inflation, 2008–13
1.9 Sub-Saharan Africa: Growth Prospects, 2012–13
1.10 Sub-Saharan Africa: Downside Scenario
1.11 Sub-Saharan Africa: Changes in CPI Inflation from 12-months Earlier, End-2012 vs. End-2011
1.12 Sub-Saharan Africa: Reserve Coverage and Current Account Balance
2.1 Sub-Saharan Africa: Intra-Regional Exports, 1981–2010
2.2 Sub-Saharan Africa: Exports to South Africa from Neighboring Countries
2.3 South Africa: Outward Direct Investment
2.4 BLNS: Customs Revenue Payments
2.5 Bilateral Correlations of Output in Sub-Saharan Africa
2.6 Western Africa: Exports to Nigeria
2.7 Relevance of Imports from Nigeria
2.8 Number of Subsidiaries of Nigerian-based Banks
2.9 Share of Migrants to Nigeria to Total Population
3.1 Sub-Saharan Africa: Agriculture’s Shares in GDP and Total Employment and Real GDP per capita, 2010
3.2 Average Labor Productivity
3.3 Growth Rate of Real GDP per Person in the Labor Force, 1995–2010
3.4 Average Years of Total Schooling and Highest Level of Education Attained
3.5 Sub-Saharan Africa: Sectoral Output and Employment, 1995–2010
3.6 Sub-Saharan Africa: Labor Productivity and Change in Employment Shares, 1995–2010
3.7 Asia: Labor Productivity and Change in Employment Shares, 1995–2010
3.8 Average Labor Productivity in the Agriculture Sector, 1985–2010
3.9 Manufacturing Productivity Growth vs. Real GDP Per Capita
3.10 Change in Manufacturing and Mining Output and Export Shares, 1995–2010
3.11 Change in Service Output and Export Shares, 1995–2010
3.12 Tanzania: Composition of Exports of Goods and Services
3.13 Namibia: Composition of Manufactured Exports
3.14 Mauritius: Exports and FDI Inflows
3.15 Contribution to Real GDP Growth by Sector, 2005–11
3.16 Kenya: ICT Services Exports