Regional Economic Outlook for sub-Saharan Africa · African Department International Monetary Fund...

African Department International Monetary Fund

November 30, 2017

Regional Economic Outlook for sub-Saharan Africa

Outline

2

1. Sharp slowdown after two decades of strong growth

2. A partial and tentative policy response3. Near-term macroeconomic challenge

• Addressing debt vulnerabilities• Emphasis on revenue mobilization• Fostering economic diversification

4. Medium-term prospects remain strong• Demographic dividend• Technology facilitating stronger catch-up growth

Since the mid‐1990s, most sub‐Saharan African countries have been registering high growth rates

3

1.4

-2-1012345678

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

20

16

Pe

rce

nt

Important progress in human development

4Developments in sub-Saharan Africa

0

200

400

600

800

1,000

1,200

Maternal mortality

Per 1

00,0

00 liv

e birt

hs

1990 2016

0

20

40

60

80

100

120

Infant mortality

Per 1

,000

birth

s

Three broad factors have facilitated the strong growth

5

Better policies and

institutions

High Commodity

Prices

Capital Inflows

But in 2016 growth slumped sharply and only a modest recovery is expected

6Developments in sub-Saharan Africa

0

1

2

3

4

5

6

7

8

2013 2014 2015 2016 2017 proj. 2018 proj. 2019 proj.

Real

GDP

grow

th, p

erce

nt

Sub-Saharan Africa

Sub-Saharan Africa excluding Nigeria and South Africa

7

The recovery is not sufficient to raise per capita growth in many countries

Developments in sub-Saharan Africa

12 43%

33 57%

Number of countries Percent of population

Nega

tiver

eal G

DP

Po

sitive

real

GDP

per c

apita

grow

th

p

er ca

pita g

rowt

h

Oil exporting economies have been hit the most

Developments in sub-Saharan Africa 8

2013 2014 2015 2016 2017 proj. 2018 proj. 2019 proj.-6

-4

-2

0

2

4

6

8

Med

ian re

al GD

P gr

owth

, per

cent

Oil exporters (8 countries)Other resource-intensive countries (15 countries)Non-resource-intensive countries (22 countries)

Outline

9





10

Easier financing conditions have brought frontier economies back to the market


0

1

2

3

4

5

6

7

8

2011 2013 2015 2017:Q2

Intern

ation

al so

verei

gn bo

nd is

suan

ces,

bllion

s of U

S do

llars

Sub-Saharan African non-oil exportersSub-Saharan African oil exporters

200

300

400

500

600

700

800

900

1,000

1,100

Jan-11 Sep-12 May-14 Jan-16 Sep-17

Sub-

Saha

ran A

frica

n fro

ntier

mar

ket in

tern

ation

al bo

nd

spre

ads,

basis

point

s

11

Exchange rate pressures have eased in many countries—the case of Nigeria


150

200

250

300

350

400

450

500

550

Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17

Nige

rian e

xcha

nge r

ates

, Nair

a pe

r US

dolla

r Interbank marketParallel rateOfficial Rate

12

Fiscal deficits are stabilizing


Oil exportersNon-resource-

intensive countriesOther resource-

intensive countries

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

2011 2013 2015 2017

Over

all fis

cal b

alanc

e, pe

rcen

t of G

DP

Interquartile rangeMedian

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

2011 2013 2015 2017


-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

2011 2013 2015 2017


Outline

13





14

Debt stocks have risen throughout the region

Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification

Oil exporters Non-resource-intensive countries

Other resource-intensive countries

10

20

30

40

50

60

70

2011 2013 2015 2017

Publi

c deb

t, per

cent

of G

DP


10

20

30

40

50

60

70

2011 2013 2015 2017


10

20

30

40

50

60

70

2011 2013 2015 2017


15

Driven by large fiscal deficits and depreciation


16

Debt service costs have increased


0

5

10

15

20

25

30

2010 2011 2012 2013 2014 2015 2016 2017 proj.

Tota

l deb

t ser

vice,

perc

ent o

f rev

enue

Interquartile rangeSub-Saharan Africa medianOil exporters median

17

Fiscal consolidation plans need to be implemented




intensive countries

10

20

30

40

50

60

70

80

90

100

2011 2014 2017 2020

Med

ian pu

blic d

ebt, p

erce

nt of

GDP

Baseline

10

20

30

40

50

60

70

80

90

100

2011 2014 2017 2020

Baseline

10

20

30

40

50

60

70

80

90

100

2011 2014 2017 2020

Baseline

18





intensive countries

10

20

30

40

50

60

70

80

90

100

2011 2014 2017 2020

Med

ian pu

blic d

ebt, p

erce

nt of

GDP

Baseline

10

20

30

40

50

60

70

80

90

100

2011 2014 2017 2020

Baseline

10

20

30

40

50

60

70

80

90

100

2011 2014 2017 2020

Baseline

19





intensive countries

10

20

30

40

50

60

70

80

90

100

2011 2014 2017 2020

Media

n pub

lic de

bt, pe

rcent

of GD

P

No adjustmentBaseline

10

20

30

40

50

60

70

80

90

100

2011 2014 2017 2020


10

20

30

40

50

60

70

80

90

100

2011 2014 2017 2020


20

Fiscal multipliers are lower in SSA

Investment-to-GDP ratio Consumption-to-GDP ratio Revenue-to-GDP ratio


Impact on GDP growth of a 1 pp increase in …

0.7

–0.6

–0.4

–0.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

0 1 2 3 4 5

Real

GDP

grow

th, p

erce

nt

Years

0.5

–0.6

–0.4

–0.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

0 1 2 3 4 5Years

–0.2

–0.6

–0.4

–0.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

0 1 2 3 4 5Years

21

Significant potential for raising tax revenues


0

5

10

15

20

25

Oilexporter

Resource-intensivecountries

Non-resourceintensivecountries

Tax r

atio,

perc

ent o

f GDP

Actual tax Tax potential

22

Diversification offers a path to growth


GNQ

BWA

UGA

-5

0

5

10

15

0 1 2 3 4 5 6 7

GDP

per c

apita

grow

th, 1

962–

2014

perc

ent

Average export diversification, 1962–2014(Higher values = less diversification)

SSA oil exporters SSA other resource-intensiveSSA non-resource-intensive Other countries

Usual factors important for diversification…

23

-4

-2

0

2

-40 -20 0 20 40

Resid

ual o

f exp

ort d

ivers

ificati

on

Residual of access to electricity, percent

SSA Non-SSA-4

-2

0

2

-0.1 0 0.1 0.2

Resid

ual o

f exp

ort d

ivers

ificati

on

Residual of Gini

SSA Non-SSA

Income Inequality (Gini) Access to Electricity

Usual factors…. (cont)

24

-4

-2

0

2

-50 -25 0 25 50 75 100

Resid

ual o

f exp

ort d

ivers

ificati

on

Residual of credit to private sector, percent

SSA

Credit to private sector

-3

-2

-1

0

1

2

-1 -0.5 0 0.5 1 1.5

Resid

ual o

f exp

ort d

iversi

ficati

on

Residual of ease of doing business

SSA

Ease of doing business

Botswana: Expanding along the value chain

• Built on an existing position in the diamond industry

• Helped to create positive spillovers to supporting sectors

• Strong record of good governance

• Prudent economic management

Uganda: Moving into manufacturing

• Expanded from agro-commodities to agro-processing

• Industrial clusters supported exports of light manufacturing

• Sustained macroeconomic stability

• Expanding regional trade supported export growth

25

Getting the policy mix right and playing to your strengths


Outline

26





Globally, working age population is projected to decline sharply in coming years

27

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1950

1965

1980

1995

2010

2025

2040

2055

2070

2085

2100

Perc

ent

World

World excluding Sub-Saharan Africa

28

By around 2030, half the increase in global work force will come from sub‐Saharan Africa

Change in 15-64 Year Old Population

-100

-50

0

50

100

150

200

250

300

35019

50

1965

1980

1995

2010

2025

2040

2055

2070

2085

2100

Millio

ns o

f per

sons

China

Rest of world

Sub-Saharan Africa

FinTech for financial inclusionIn some countries, mobile account growth outpaced bank account

0

10

20

30

40

50

60

70

Mobile account

Bank account

Source: Global Findex, World Bank

Countries with more mobile accounts than bank accounts

(% age 15+) in Sub-Saharan Africa, 2014

0

2,000

4,000

6,000

8,000

10,000

12,000

Dec-12 Dec-13 Dec-14

Central Africa Southern Africa

Western Africa Eastern Africa

Source: GSMA Mobile Money

30

0.70.91.41.51.82.02.02.33.13.83.94.44.5

6.26.6

9.210.4

11.612.1

13.014.4

18.120.8

21.624.3

32.435.1

58.4

0 10 20 30 40 50 60Burundi

MauritiusTogo

GuineaCameroon

Congo, Rep.Benin

NigeriaBurkina Faso

MalawiNiger

MadagascarSierra Leone

SenegalGabon

Congo, Dem. Rep.Namibia

MaliZambiaGhana

South AfricaRwanda

BotswanaZimbabwe

Cote d'IvoireTanzaniaUganda

Kenya

Source: Global Findex, World Bank

Mobile account (% age 15+) in Sub-Saharan Africa, 2014

Thank you!

31

The online edition of the Regional Economic Outlook

for sub-Saharan Africa is now available online at

www.imf.org

Regional Economic Outlook for sub-Saharan Africa · African Department International Monetary Fund...

Documents

Transcript of Regional Economic Outlook for sub-Saharan Africa · African Department International Monetary Fund...