- Published Date:
- January 2006
SUB-SAHARAN AFRICA REGIONAL ECONOMIC OUTLOOK
This edition of the Sub-Saharan Africa Regional Economic Outlook was prepared by an AFR staff team led by Delphin Rwegasira, with broad guidance provided by Anupam Basu. W. Scott Rogers was the coordinating author of the text, with contributions from Jon Shields, Shahabuddin Hossain, Gretchen Byrne, and Behrouz Guerami. Thomas Walter was editor, and Yvette Conell, Madje Amega, and Ramatu Kabia were responsible for document preparation. The views expressed in this document are those of the contributors, and not necessarily of the African Department or of the IMF.
The updated Regional Economic Outlook for sub-Saharan Africa paints a mixed picture of economic outcomes in 2003 and projections for 2004. On the bright side, a significant number of countries continued to experience relatively strong growth in 2003, and the number is expected to increase this year. The better-performing countries achieved significant progress in improving governance and fighting corruption, establishing stable macroeconomic conditions, raising domestic savings and investment, and attracting increased external capital flows. This combination has improved the countries’ prospects for approaching or attaining the Millennium Development Goals (MDGs).
For the majority of countries in the region, however, reasonable and sustained growth rates remain elusive, and the latest global estimates on poverty cited in this Outlook indicate that nearly one-half of the population lives below the poverty line. This situation will undoubtedly be further complicated by the impact of the HIV/AIDS pandemic across the continent, adding to the cumulative effects of disease and inadequate nutrition and water supply on the continent’s human capital. As well, conflicts continue to undermine progress in a number of countries.
Against this background, recent developments provide a basis for optimism. Many countries have strengthened their macroeconomic frameworks, bringing down their inflation rates to low levels and reducing fiscal deficits. The UNDP’s human development index has increased in recent years for the three-fifths of the countries for which data are available. And national frameworks for development management have been strengthened, notably through the participatory PRSPs, while regional political economy initiatives, including the New Partnership for African Development (NEPAD) and the establishment of the African Union, have provided the needed basis for encouraging better governance and continental and international cooperation.
Africa’s central challenge remains one of markedly accelerating growth above the recent trend level, while strengthening institutions and enhancing poverty reduction efforts. As a starting point, the lessons from the successes achieved so far in the faster-growing countries of the region need to be applied more broadly in the other countries, in the context of strengthened national and regional frameworks. The enormous development challenges also call for more decisive support from the international community. The Monterrey consensus, the G-8 Africa Action Plan, and related initiatives provide a helpful basis for forging ahead. These need to be translated into timely actions for substantial increases in aid flows and debt relief—as well as in market access for Africa’s exports—if the economic growth and poverty reduction objectives are to be achieved. Such actions would hopefully be accompanied by enhanced private capital flows.
It is our wish that the analysis in the Regional Economic Outlook can contribute to the policy dialogue and the shaping of responses necessary to address Africa’s pressing development challenges.