This paper draws on updates of selected macroeconomic and structural indicators to describe current economic trends in sub-Saharan African countries and to provide measures of the policy stance and of its impact on economic performance.
The paper presents contrasting findings. Overall, real GDP growth has been sluggish since 1989, the last year output growth exceeded population growth, partly because of a continuing weakness of export commodity prices. A disturbingly large number of countries continue to record overall budget deficits, including grants, of more than 3 percent of GDP. About two thirds of the countries have been running large current account deficits, and their ratios of external debt to GDP have continued to rise, sometimes at an alarming rate.
The paper also finds, however, that an increasing number of countries (currently 21 of the 26 non-CFA countries) have liberalized their exchange regimes, a move often associated with a transition to liberal credit markets. Countries that have moved in this direction have achieved a stronger depreciation of their real effective exchange rate, better growth, and better external viability than the other countries. Thus, they appear to have adjusted more fully to the adverse terms of trade shocks that have affected most countries. It may therefore be expected that, with a lag, the newly liberalized economies will experience a better performance.