Growth in sub-Saharan Africa has weakened after more than a decade of solid growth, although this overall outlook masks considerable variation across the region. Some countries have been negatively affected by falling prices of their main commodity exports. Oil-exporting countries, including Nigeria and Angola, have been hit hard by falling revenues and the resulting fiscal adjustments, while middle-income countries such as Ghana, South Africa, and Zambia are also facing unfavorable conditions. This October 2015 report discusses the fiscal and monetary policy adjustments necessary for these countries to adapt to the new environment. Chapter 2 looks at competitiveness in the region, analyzing the substantial trade integration that accompanied the recent period of high growth, and policy actions to nurture new sources of growth. Chapter 3 looks at the implications for the region of persistently high income and gender inequality and ways to reduce them.
Front Matter
Chapter 1: Dealing with the Gathering Clouds
Economic activity in sub-Saharan Africa has
weakened markedly. To be sure, growth—at
3¾ percent this year and 4¼ percent in 2016—
still remains higher than in many other emerging
and developing regions of the world. Still, the
strong growth momentum evident in the region in
recent years has dissipated in quite a few cases.
- Strong Headwinds from the External Environment
- More Difficult Domestic Conditions
- Lower Growth amid Persistent Risks
- Special Focus: Creating Fiscal via Better Domestic Revenue Mobilization
- Annex 1.1. Estimating the Tax Frontier
Chapter 2: Competitiveness in Sub-Saharan Africa: Marking Time or Moving Ahead?
In recent years the sub-Saharan African region has
experienced strong real GDP growth and substantial
trade integration. However, growth in sub-
Saharan Africa’s trade volumes has not kept up with
growth in the volume of global trade during this
period and its trade imbalances have begun to rise
in recent years. Meanwhile, the drivers of growth
since the mid-1990s—improved policies, increased
aid, debt relief, abundant global liquidity, and high
global commodity prices—have started to dissipate.
Moving forward, to sustain rapid growth the region
will need to diversify away from commodities,
increase export sophistication, and integrate into
global value chains. This chapter assesses how
competitiveness indicators in sub-Saharan Africa
have evolved, and on this basis asks if the region is
well placed to diversify its export base and sustain
growth. It also discusses policy options to improve
competitiveness.
- Setting the Stage
- Indicators of Competitiveness: What Do They Reveal?
- Competitiveness and Growth
- Some Policy Implications
- Annex 2.1. Methodology on Construction of GVC-Based REER
- Annex 2.2. Construction of Import Average and Export Average Relative Price Measures
- Annex 2.3. Estimation of Duration Dependence of Growth Spells
Chapter 3: Inequality and Economic Outcomes in Sub-Saharan Africa
Sub-Saharan Africa has among the highest levels
of inequality—both income and gender—in the
world, even after accounting for the lower levels
of per capita income in the region. With growing
international evidence that such inequality can
impede macroeconomic stability and growth
(Box 3.1), this chapter considers factors behind
high levels of inequality and how they differ from
the experience in other parts of the world, and
discusses policy options for reducing inequality
and raising sustainable growth.
- Sub-Saharan African Trends in Inequality
- Inequality and Growth Performance in the Region
- What Drives Income Inequality?
- Policies to Reduce Inequality
- Conclusions
- Annex 3.1. Understanding Income and Gender Inequality in Sub-Saharan Africa
- Annex 3.2. Drivers of Inequality
Statistical Appendix
References
Publications of the IMF African Department, 2009-15
