In recent years, economic performance in most of sub-Saharan Africa has improved. Growth has picked up, resulting in an increase in per capita output in a number of countries, inflation has decelerated markedly, and the fiscal and external deficits have been reduced. In large part, the economic recovery can be attributed to improved macroeconomic and structural policies rather than to favorable external developments, such as terms of trade gains. Indeed, these favorable developments have been achieved at a time when official development assistance has been declining. Key structural reforms have been implemented in many African countries, including curtailing of price controls, dismantling of some inefficient public monopolies, privatization, elimination of nontariff barriers in most countries, and a reduction in import duties in many. At the same time, exchange rates have been largely freed and unified, restrictions on current transactions liberalized, and important progress has been made toward market-determined interest rates in most countries.

The economic situation remains difficult. But sub-Saharan Africa may have reached a turning point. The incipient improvements need to be nursed assiduously if the recent gains are to be translated into sustained growth.

Experience and research demonstrate that trade liberalization is a critical element in a growth strategy. As part of the effort to address trade issues in Africa, the IMF, in collaboration with the African Economic Research Consortium (AERC), conducted a seminar on Trade Reform and Regional Integration in Africa in Washington in early December 1997. The event provided an important opportunity to government officials, academics, and representatives from multilateral and regional agencies to exchange views on the complex issues relating to trade reform and regionalism in Africa. This volume brings together papers presented during the seminar. They cover a range of important issues, including the role of trade liberalization in promoting sustained growth, interdependence of trade and macroeconomic policies, impediments to effective trade reforms, and steps needed to accelerate trade reform in Africa. The role that regional interaction can play in supporting trade reform is also covered extensively.

What emerges from these papers, and the ensuing seminar discussions, is a clear consensus that trade liberalization is essential if African countries are to take advantage of globalization. Combining forces with similarly placed African countries through the formation of appropriate regional trading arrangements can lead to faster liberalization and can reduce vulnerability to external shocks.

STANLEY FISCHER First Deputy Managing Director International Monetary Fund