Growth in real GDP in sub-Saharan Africa is projected to slow to 4.8 percent in 2006 from 5.6 percent in 2005, but to pick up to almost 6.0 percent the following year, according to the IMF’s economic outlook for the region, released in Singapore on September 16. The brief slowdown is largely the result of a temporary fall in oil production in oil-exporting countries like Equatorial Guinea, Chad, and Nigeria and a moderation of growth in South Africa to more sustainable levels (see table). Inflation (excluding in Zimbabwe) is projected to drop to 6.9 percent in 2006 from 8.2 percent the previous year, particularly because of the fall in inflation in oil-producing countries (see chart).
African countries will see robust growth in both 2006 and 2007.
|(real GDP growth, percent)|
|Congo, Rep. of||2.4||3.6||7.9||7.4||2.1|
|Central African Republic||3.4||1.3||2.2||3.2||3.8|
|Congo, Dem. Rep. of||-4.1||6.6||6.5||6.5||7.2|
|Sao Tome and Principe||2.6||3.8||3.8||5.5||5.5|
|Excluding Nigeria and South Africa||3.6||6.5||5.9||5.1||7.2|
Growth in oil-importing countries as a whole is expected to decline to 4.5 percent from 5 percent in 2005, though 17 of these countries—about the same number as in 2005—are expected to experience growth of 5 percent or more. In many oil-importing countries, the impact of persistently high petroleum prices has been mitigated by rising export prices for nonfuel commodities. “This growth performance demonstrates the growing robustness of economic growth in sub-Saharan Africa,” Abdoulaye Bio-Tchané, Director of the IMF’s African Department, told reporters.
He stressed, however, that there were several factors that could tarnish this favorable picture. “Export demand could be lower if activity in the rest of the world slows from the impact of the unwinding of global imbalances and tighter monetary policies. Growth and inflation could also be adversely affected by further increases in oil prices and a larger-than-expected fall in nonfuel commodity prices. And there are still political risks in a number of countries in the region,” he stated.
Bio-Tchané said that the scaling up of aid, promised by the international community at the Gleneagles Summit a year ago, has yet to materialize, but private capital inflows are rising in some countries as surging commodity prices and debt relief make the region a more attractive place to invest. “Still, countries in sub-Saharan Africa will have to do much more to lower the costs of doing business if private sector activity is to flourish,” he added.
Curbing African inflation
Inflation is moderating, particularly in the oil-producing nations.
Citation: 35, 18; 10.5089/9781451968699.023.A009
Data: IMF, African Department database.