Sub-Saharan Africa
Maintaining Growth in an Uncertain World
October 2012
©2012 International Monetary Fund
Economic conditions in sub-Saharan Africa have remained generally robust despite a sluggish global economy. The near-term outlook for the region remains broadly positive, and growth is projected at 5¼ percent a year in 2012–13. Most low-income countries are projected to continue to grow strongly, supported by domestic demand, including from investment. The outlook is less favorable for many of the middle-income countries, especially South Africa, that are more closely linked to European markets and thus experience a more noticeable drag from the external environment. The main risks to the outlook are an intensification of financial stresses in the euro zone and a sharp fiscal adjustment in the US–the so called fiscal cliff.
| Contents | |||||||||
| Abbreviations | |||||||||
| Acknowledgements | |||||||||
| In Brief | |||||||||
| 1. Maintaining Growth in an Uncertain World | |||||||||
| Introduction and Summary | |||||||||
| Resilience in the Face of an Uncertain Environment | |||||||||
| Risk Scenario Analysis | |||||||||
| Is There Still Room for Policy Action if Needed? | |||||||||
| Policy Recommendations | |||||||||
| Concluding Remarks | |||||||||
| 2. Nigeria and South Africa: Spillovers to the Rest of Sub-Saharan Africa | |||||||||
| Introduction and Summary | |||||||||
| South Africa’s Impact on Sub-Saharan Africa | |||||||||
| Nigeria’s Impact on its Neighbors | |||||||||
| Concluding Remarks | |||||||||
| 3. Structural Transformation in Sub-Saharan Africa | |||||||||
| Introduction and Summary | |||||||||
| Stylized Facts | |||||||||
| Sectoral Perspectives | |||||||||
| Some Impediments to Structural Transformation | |||||||||
| Conclusions and Future Prospects | |||||||||
| Statistical Appendix | |||||||||
| References | |||||||||
| Publications of the IMF African Department, 2009–12 | |||||||||
| Boxes | |||||||||
| 1.1 | South Sudan: Newest IMF Member | ||||||||
| 1.2 | Debt Dynamics in the Baseline over the Medium-Term | ||||||||
| 1.3 | Global Food Prices and Food Security in Sub-Saharan Africa | ||||||||
| 1.4 | Energy Subsidies in Sub-Saharan Africa: Costly, Untargeted, and Inefficient | ||||||||
| 2.1 | The Role of Nigeria and South Africa in the Network of Sub-Saharan African Merchandise Trade | ||||||||
| 2.2 | Linkages among Sub-Saharan Africa Stock Exchanges | ||||||||
| 2.3 | Spillovers within the Southern Africa Customs Union | ||||||||
| 2.4 | Energy Linkages between Nigeria and Surrounding Countries | ||||||||
| 2.5 | Informal Trade between Benin and Nigeria | ||||||||
| 3.1 | Structural Transformation in Asia | ||||||||
| 3.2 | Formal and Informal Employment | ||||||||
| Tables | |||||||||
| 1.1 | Sub-Saharan Africa: Real GDP Growth | ||||||||
| 1.2 | Sub-Saharan Africa: Other Macroeconomic Indicators | ||||||||
| 1.3 | Sub-Saharan Africa: Financial Soundness Indicators in 2011, Selected Countries | ||||||||
| 1.4 | Sub-Saharan Africa: Indicators for Fiscal Policy Room | ||||||||
| 2.1 | Sub-Saharan Africa: Key Nonfinancial South African Firms Operating in the Region | ||||||||
| 2.2 | Sub-Saharan Africa: Key South Africa-based Financial Groups Operating in the Region | ||||||||
| 2.3 | Sub-Saharan Africa: Key Linkages with South Africa, 2010 | 2.4 | Main Recipients of Remittances from Nigeria | 2.5 | Nigeria and Neighboring Countries’ GDP | 2.6 | Nigeria and Neighboring Countries’ CPI | 3.1 | Structural Transformation in Sub-Saharan African Countries: Productivity Growth and Change in Agricultural Output Shares, 1995–2010 |
| 3.2 | Structural Transformation in Sub-Saharan African Countries: Output Shares of Ariculture, Mining, Manufacturing, Construction, and the Tertiary Sector, 1995–2010 | ||||||||
| 3.3 | Education Characteristics 2010 | 3.4 | Structural Impediments | ||||||
| Figures | |||||||||
| 1.1 | Sub-Saharan Africa: Food and Nonfood Inflation | ||||||||
| 1.2 | Sub-Saharan Africa: Nominal Credit to the Private Sector | ||||||||
| 1.3 | Sub-Saharan Africa: Overall Fiscal Balance, 2004–13 | ||||||||
| 1.4 | Sub-Saharan Africa: Government Debt Ratios, 2000–12 | ||||||||
| 1.5 | Sub-Saharan Africa: Exports and the Current Account by Regional Groups | ||||||||
| 1.6 | Sub-Saharan Africa: Financial Soundness Indicators | ||||||||
| 1.7 | Selected Regions: Real GDP Growth, 2008–13 | ||||||||
| 1.8 | Selected Regions, Inflation, 2008–13 | ||||||||
| 1.9 | Sub-Saharan Africa: Growth Prospects, 2012–13 | ||||||||
| 1.10 | Sub-Saharan Africa: Downside Scenario | ||||||||
| 1.11 | Sub-Saharan Africa: Changes in CPI Inflation from 12-months Earlier, End-2012 vs. End-2011 | ||||||||
| 1.12 | Sub-Saharan Africa: Reserve Coverage and Current Account Balance | ||||||||
| 2.1 | Sub-Saharan Africa: Intra-Regional Exports, 1981–2010 | ||||||||
| 2.2 | Sub-Saharan Africa: Exports to South Africa from Neighboring Countries | ||||||||
| 2.3 | South Africa: Outward Direct Investment | ||||||||
| 2.4 | BLNS: Customs Revenue Payments | ||||||||
| 2.5 | Bilateral Correlations of Output in Sub-Saharan Africa | ||||||||
| 2.6 | Western Africa: Exports to Nigeria | ||||||||
| 2.7 | Relevance of Imports from Nigeria | ||||||||
| 2.8 | Number of Subsidiaries of Nigerian-based Banks | ||||||||
| 2.9 | Share of Migrants to Nigeria to Total Population | ||||||||
| 3.1 | Sub-Saharan Africa: Agriculture’s Shares in GDP and Total Employment and Real GDP per capita, 2010 | ||||||||
| 3.2 | Average Labor Productivity | ||||||||
| 3.3 | Growth Rate of Real GDP per Person in the Labor Force, 1995–2010 | ||||||||
| 3.4 | Average Years of Total Schooling and Highest Level of Education Attained | ||||||||
| 3.5 | Sub-Saharan Africa: Sectoral Output and Employment, 1995–2010 | ||||||||
| 3.6 | Sub-Saharan Africa: Labor Productivity and Change in Employment Shares, 1995–2010 | ||||||||
| 3.7 | Asia: Labor Productivity and Change in Employment Shares, 1995–2010 | ||||||||
| 3.8 | Average Labor Productivity in the Agriculture Sector, 1985–2010 | ||||||||
| 3.9 | Manufacturing Productivity Growth vs. Real GDP Per Capita | ||||||||
| 3.10 | Change in Manufacturing and Mining Output and Export Shares, 1995–2010 | ||||||||
| 3.11 | Change in Service Output and Export Shares, 1995–2010 | ||||||||
| 3.12 | Tanzania: Composition of Exports of Goods and Services | ||||||||
| 3.13 | Namibia: Composition of Manufactured Exports | ||||||||
| 3.14 | Mauritius: Exports and FDI Inflows | ||||||||
| 3.15 | Contribution to Real GDP Growth by Sector, 2005–11 | ||||||||
| 3.16 | Kenya: ICT Services Exports | ||||||||