Abstract
The region's prospects continue to be promising, but global developments pose increased risks to the outlook. Growth in sub-Saharan Africa should again average about 6½ percent in 2008 with oil exporters leading the way; meanwhile, growth in oil importers is expected to taper off, though only modestly. With food and energy prices still rising, inflation is projected to average about 8½ percent this year for countries in the region, setting aside Zimbabwe. Risks in 2008 are tilted to the downside, but the region is better placed today to withstand a worsening of the global environment.
The staff report for the First Review under the Policy Support Instrument and Modifications to Assessment Criteria discusses Uganda’s medium-term expenditure framework (MTEF). The MTEF aims at higher public savings based on spending restraint and a rising domestic revenue ratio. The Bank of Uganda (BOU) will rely on a combination of foreign exchange sales and open market operations to sterilize liquidity. Better and more extensive transport networks and expansion of the pool of long-term savings are also critical for sustainable economic growth.
Abstract
Macroeconomic developments in sub-Saharan Africa were broadly positive in 2007, with growth steady and as expected across most of the region. Inflation remains largely contained. The immediate prospects are for continued economic expansion but with a widening gap between oil exporters and oil importers. Because of the less favorable external environment, risks in 2008 are tilted to the down side, with the possibility of persistent high oil prices and a weakening of non-oil commodity prices as growth in major commodity-importing countries decelerates. Against this background, policymakers face the challenge of maintaining macroeconomic stability and moving their reform agenda forward.
Abstract
A marked improvement in macroeconomic conditions in most sub-Saharan African countries in recent years has reshaped the environment for monetary and exchange rate policy. A number of post-conflict economies are still in a stabilization phase and remain vulnerable, and a much smaller number suffer from severe instability, but in many sub-Saharan African countries higher economic growth has been associated with lower inflation, higher international reserves, and healthier public finances (Chapter 1).
Abstract
Private capital inflows to sub-Saharan African countries, having more than quadrupled since 2000, represent an increasingly important share of foreign financing to these countries.1 This mirrors the trends among developed and emerging market countries, where capital flows have also surged owing to abundant global liquidity. Private equity and debt flows to sub-Saharan African countries remain small and are estimated at about US$53 billion in 2007, compared with total global capital inflows of about US$6.4 trillion in 2006. In 2006, private capital flows to sub-Saharan Africa overtook official aid for the first time.2 The bulk of these flows went to South Africa and Nigeria, but portfolio flows are also trending up in a small group of other countries—notably, Ghana, Kenya, Tanzania, Uganda, and Zambia—in response to improved risk ratings and attractive yields.
Abstract
Sub-Saharan Africa faces major infrastructure challenges, the most severe of which are arguably those in the power sector. Not only is the region’s energy infrastructure meager compared with other regions but electricity service is costly and unreliable. Indeed, in recent years more than 30 of the 48 countries in the region have suffered acute energy crises. This chapter presents preliminary findings from the Africa Infrastructure Country Diagnostic (see Box 4.1 for further details), which aims to unravel the paradoxes of sub-Saharan Africa’s troubled power sector.