Press Release No. 10/164

Press Release: IMF Outlook for Sub-Saharan Africa Is Optimistic about Growth Prospects

April 23, 2010

The International Monetary Fund (IMF) today released the April 2010 Regional Economic Outlook: Sub-Saharan Africa. Ms. Antoinette Monsio Sayeh, Director of the IMF's African Department commented on the report's main findings:

“The economic slowdown in sub-Saharan Africa looks set to be mercifully brief. Output is projected to expand by 4¾ percent in 2010, compared to 2 percent in 2009. Provided the global economy continues to improve, growth in the region should accelerate further still to 5¾ percent in 2011.

“The impact of the global financial crisis on countries in the region was quite varied. Output levels in most middle-income countries were dragged down by the sharp fall in export volumes in early 2009 as world demand collapsed. Growth in oil-exporting countries also decelerated sharply, partly reflecting the drop in oil prices. In contrast, many low-income countries escaped fairly lightly, with some fragile economies actually experiencing a small acceleration in output growth in 2009.

“The relatively limited nature of the region’s slowdown owes much to the health of the region’s economies heading into 2008–09 and the countercyclical macroeconomic policies that were pursued in many countries. Nearly two-thirds of countries experiencing a slowdown in 2009 were able to increase government spending to buttress economic activity. Policy interest rates were also reduced in most countries.

“Of course, the slowdown has nonetheless entailed considerable social dislocation and suffering. As a result, slower progress can be expected toward the Millennium Development Goals.

“Looking ahead, policies in sub-Saharan Africa will need to adjust to an external environment that is better, but still with an elevated level of uncertainty. Policy buffers will need to be rebuilt and financial systems strengthened in preparation for possible unanticipated shocks. The emphasis of economic policies now needs to move from short-term output stabilization to medium-term development objectives consistent with macroeconomic stability considerations, unless large output gaps persist.

“The IMF stepped up the pace, volume and flexibility of its lending to sub-Saharan Africa in 2009. Over $5 billion of finance was committed: nearly a fivefold increase over 2008 (excluding arrears-related lending). In addition, the SDR allocations in August and September 2009 provided nearly $12 billion of reserve assets to the region. Going forward, it will be critical that other development partners and international financial institutions continue to support sub-Saharan African countries during the recovery.” Ms. Sayeh said.

The full text of the April 2010 Regional Economic Outlook: Sub-Saharan Africa can be found on the IMF's website, www.imf.org.