Front Matter

Front Matter

Author(s):
International Monetary Fund. African Dept.
Published Date:
October 2007
    Share
    • ShareShare
    Show Summary Details

    © 2007 International Monetary Fund

    Cataloging-in-Publication Data

    Regional economic outlook: Sub-Saharan Africa — [Washington, D.C.] : International

    • Monetary Fund, 2007.

      • p. cm. — (World economic and financial surveys)

    OCT 07.

    Includes bibliographical references.

    ISBN 978-1-58906-670-0

    1. Economic forecasting — Africa, Sub-Saharan. 2. African cooperation. 3. Africa, Sub-Saharan — Economic conditions — 1960- 4. Africa, Sub-Saharan — Economic conditions — 1960- — Statistics. I. Title: REO. II. International Monetary Fund. III. Series (World economic and financial surveys)

    HC800 .R445 2007

    Price: US$31.00

    (US$26.00 to full-time faculty members and students at universities and colleges)

    Please send orders to:

    International Monetary Fund, Publication Services 700 19th St. N.W., Washington, D.C. 20431, U.S.A. Tel.: (202) 623-7430 Telefax: (202) 623-7201

    E-mail: publications@imf.org

    Internet: www.imf.org

    Contents

    The following conventions are used in this publication:

    • In tables, a blank cell indicates “not applicable” and ellipsis points (…) indicate “not available,” and 0 or 0.0 indicates “zero” or “negligible.” Minor discrepancies between sums of constituent figures and totals are due to rounding.

    • An en dash (–) between years or months (for example, 2005–06 or January–June) indicates the years or months covered, including the beginning and ending years or months; a slash or virgule (/) between years or months (for example, 2005/06) indicates a fiscal or financial year, as does the abbreviation FY (for example, FY2006).

    • “Billion” means a thousand million; “trillion” means a thousand billion.

    • “Basis points” refer to hundredths of 1 percentage point (for example, 25 basis points are equivalent to ¼ of 1 percentage point).

    Preface

    This report was prepared in the Policy Wing of the African Department of the International Monetary Fund, under the direction of Benedicte Vibe Christensen, Deputy Director. Research was coordinated by Andrew Berg and Calvin McDonald, with contributions from Paulo Drummond, Jan Gottschalk and Ulrich Jacoby; and Corinne Delechat, Dimitry Gershenson, Alejandro Hajdenberg, Emmanuel Hife, Stella Kaendera, Armine Khachatryan, Stanislaw Maliszewski, Kirsty Mason, Wayne Mitchell, Gillian Nkhata, Catherine Pattillo, Robert Sharer, Amadou Sy, Charalambos Tsangarides, Smita Wagh, and Felipe Zanna. Gustavo Ramirez and Saeed Mahyoub prepared the charts and statistical tables, Elizabeth Miranda and Anne Grant provided editorial assistance, and Emma Morgan was responsible for document production, with assistance from Natasha Minges. Marina Primorac of the IMF’s External Relations Department copyedited the manuscript and coordinated production of the printed publication.

    The report benefited from comments from staff in the African and other departments of the IMF. Opinions expressed in this report are those of the authors and do not necessarily represent the views of the IMF or its Executive Board. The report is based on data available as of October 1, 2007.

    Abbreviations

    BOAD

    West African Development Bank

    CEMAC

    Central African Economic and Monetary Community

    COMESA

    Common Market of Eastern and Southern Africa

    DMS

    Debt Management Strategy (Uganda)

    DSA

    Debt Sustainability Analysis

    EAC-15

    East African Community

    FDI

    Foreign direct investment

    HIPC

    Heavily indebted poor countries

    MAMS

    World Bank’s Maquette for MDG Simulations

    MDG

    Millennium Development Goal

    MDRI

    Multilateral Debt Relief Initiative

    MGDS

    Malawi Growth and Development Strategy

    ODA

    Official development assistance

    PFM

    Public financial management

    PPP

    Purchasing power parity

    PRSP

    Poverty Reduction Strategy Paper

    PSIA

    Poverty and Social Impact Analysis

    SADC

    Southern African Development Community

    URA

    Uganda Revenue Authority

    VAT

    Value-added tax

    WAEMU

    West African Economic and Monetary Union

    WTO

    World Trade Organization

    Executive Summary

    In recent years, sub-Saharan Africa has been experiencing its strongest growth and lowest inflation in over 30 years. Growth in sub-Saharan Africa should reach 6 percent in 2007 and 6¾ percent in 2008, both slightly lower than projected in the April Regional Economic Outlook: Sub-Saharan Africa but up from about 5½ percent in 2006 (Chapter 1). The economic expansion is strongest in oil exporters but cuts across all country groups. On the external front, it reflects strong demand for commodities, increased capital inflows, and debt relief. Internally, continued progress in stabilizing economies and implementing reforms in most countries has helped sustain rising investment and productivity. Inflation (excluding Zimbabwe) should average 7½ percent in 2007—with inflation in 32 out of 44 countries in single digits—and fall to 6¾ percent in 2008.

    Can the growth momentum be sustained? In the past, because of weak institutions and volatile terms of trade and other shocks, growth episodes in sub-Saharan Africa have generally been shorter than in other regions and often ended with a dramatic collapse in output. In the current expansion, many countries have benefited from improved terms of trade, but there are also signs that macroeconomic and policy conditions continue to improve, which should help sustain growth. Many other sub-Saharan African countries have sustained growth for several years despite stable or declining terms of trade. These countries are reaping the benefits of economic reforms and improved macroeconomic policies, as well as a decline in armed conflicts and political instability. As a result, investment has increased, economic growth has strengthened, and income volatility has fallen. Sustaining the current expansion and reducing poverty ultimately depend on each country’s ability to pursue structural and institutional reforms to increase productivity, boost resilience to shocks, and attract private investment.

    Having successfully stabilized their economies, many sub-Saharan African countries have been increasingly reorienting fiscal policies toward promoting economic growth and poverty reduction. Chapter 2 provides an overview and discusses the experiences of five countries in creating and using this fiscal space to accelerate progress toward meeting the Millennium Development Goals. These experiences suggest some lessons that are salient for other sub-Saharan African countries. First, domestic revenue mobilization has clear advantages as a source of fiscal space for countries where the revenue share in GDP is low, but the required institutional reforms take time to implement and should therefore be given priority. Second, improving the efficiency of expenditures is key, but many countries still have a large reform agenda. Third, the possible adverse impact of aid inflows on external competitiveness can be mitigated by frontloading productivity-enhancing expenditures. Fourth, more needs to be done to anchor fiscal policy decisions in a medium-term framework; only a few countries have sophisticated frameworks that provide a link to government objectives and include detailed costing of sector-specific programs while accounting for the recurrent cost implications.

      You are not logged in and do not have access to this content. Please login or, to subscribe to IMF eLibrary, please click here

      Other Resources Citing This Publication