This year looks set to be another encouraging one for most sub-Saharan African economies. Reflecting mainly strong domestic demand but also elevated commodity prices, the region’s economy is set to expand by 5¼ percent in 2011. For 2012, our baseline projection is for growth to be higher at 5¾ percent, owing to one-off boosts to production in a number of countries.
During the past decade, sub-Saharan African countries have increasingly started exploiting new markets, marking what seems to be a historic reorientation of their trade and investment toward new partners, including those within the region (as defined in Appendix I). Very importantly, this reorientation has largely occurred through trade creation rather than trade diversion, as engagement with traditional partners has continued to grow in recent years, though at a slower pace than that with new partners. The broad aims of this chapter are to shed light on the extent of this reorientation, what it implies for sub-Saharan African countries, and the opportunities and challenges it poses.
Céline Allard, Mr. Jorge I Canales Kriljenko, Mr. Jesus R Gonzalez-Garcia, Emmanouil Kitsios, Mr. Juan P Trevino, and Ms. Wenjie Chen
This analysis of the extent of trade integration of sub-Saharan African (SSA) countries in the global economy as well as within the region over the 1995–2013 period focuses on four key concepts: (1) trade openness, captured by import and export flows; (2) the centrality in the global and regional trade network, a measure that takes into account not only the size of trade but also the number of trade partners and the respective weight of these trade partners in global trade; (3) gravity model estimates that account for country- and region-specific determinants of bilateral trade flows; and (4) global value chain (GVC) integration. Using both existing data and a newly available dataset based on multiregion input and output tables, this analysis led to several findings: (1) trade openness has increased strongly; (2) integration in the global economy has made the region more vulnerable to external shocks; (3) levels of trade flows emanating from sub-Saharan Africa are still only half the magnitude of those experienced elsewhere in the world; (4) the region still has ways to go to better integrate in GVCs; and (5) it is more critical than ever to make progress in filling the infrastructure gap by lowering tariff and nontariff barriers, improving the business climate and access to credit, and continuing to enhance education outcomes.
Edited by Zubair Iqbal and Ravi Kanbur, this volume consists of papers presented at a joint IMF and World Bank conference on external financing for low-income countries. The primary focus was on the impact of external indebtedness on low-income countries, mainly in sub-Saharan Africa, the HIPC Debt initiative, the determinants and role of private capital flow, policies that could be implemented to catalyze private capital flows, and the appropriate role for official finance in the period ahead.
The continuing rise in oil prices is having profound effects on the countries in sub-Saharan African (SSA).1 This report sets out to examine those effects and answer such basic questions as: How have oil-importing countries adjusted to the increased costs? And how have oil-exporting countries used their increased revenues? The report first reviews economic developments in the region in 2006 (Chapter II) and prospects for 2007 (Chapter III). It then analyzes the implications of rising oil prices for GDP, inflation, and the poor (Chapter IV).
Economic growth in sub-Saharan Africa is expected to moderate from 5.6 percent in 2005 to 4.8 percent in 2006 (Figure 2.1 and Table 2.1).2 For oil exporters, there are temporary constraints on expanding oil production;and South Africa’s expected decline to potential growth explains much of the slowdown for the oil-importing group. The impact of persistently high petroleum prices on importers has been mitigated in many countries by rising export prices for nonfuel commodities (Figure 2.2). Since 2002, investment in SSA has also been rising. If the trend can be sustained, it augurs well for future growth.
Average growth for SSA is projected to accelerate to 5.9 percent in 2007, primarily because of rising petroleum output in a few oil-producing countries (Figure 3.1).18 Output growth in oil-exporting countries is forecast to increase sharply, from 5.6 to 10.1 percent, as new oil fields come on stream in Angola and Equatorial Guinea. Growth is projected to more than double to 31 percent in Angola, and to rise to over 9 percent in Equatorial Guinea. However, improved growth in Nigeria depends on there being no further disruption of oil production in the Niger delta. Growth in other oil-producing economies is expected to accelerate to between 2½ to 4½ percent—except in the Republic of Congo, where it is expected to decline sharply to about 2 percent as several large oil fields mature.