Transcript PPT presentation

Regional Economic Outlook
Sub-Saharan Africa
By: Andrew Berg and Paulo Drummond
African Department
International Monetary Fund
Main Points
1. In 2007 sub-Saharan Africa experienced
one of its highest growth rates in
decades.
2. The region’s economic prospects remain
robust: GDP growth is expected at 6½
percent; inflation to remain contained at
8½ percent.
3. Compared to the 1990s, the region is
better placed to withstand a worsening of
the global environment.
Main Points (cont’d)
4. Risks to the outlook are tilted to the
downside.
5. Rising commodities prices pose
immediate challenges.
6. Main medium-term challenge:
accelerate growth and reduce poverty
to achieve the MDGs
A Comparison of Growth
Sub-Saharan Africa growth is robust.
8
7
Real GDP Growth
(Percent)
Sub-Saharan Africa
World
Developing countries
6
5
4
3
2
1
0
1970s
1980s
1990s
2000–07
Sources: IMF, World Economic Outlook; and IMF, African Department database.
The Economic Expansion
Cuts Across Countries
Growth in SSA
10
8
Real GDP Growth
(Percent)
6
4
2
0
SSA
Oil-exporting countries
Middle-income countries
Low-income countries
Fragile countries
-2
-4
2000
2001
2002
2003
2004
2005
2006
Source: IMF, World Economic Outlook; and IMF African Department database.
2007
Oil Prices and GDP Growth in Sub-Saharan Africa
18
(Annual percent change)
(U.S.$/barrel)
16
Oil exporters (left scale)
Oil importers (left scale)
Oil price (right scale)
14
100
80
12
10
60
8
40
6
4
20
2
0
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
Sources: IMF, World Economic Outlook; and IMF, African Department database.
Growth Prospects in Sub-Saharan Africa
Growth is projected to remain robust.
8
Real GDP Growth
(Percent)
7
6
5
50 percent
4
70 percent
90 percent
3
2
2000
2001
2002
2003
2004
2005
2006
2007
2008
Sources: IMF, World Economic Outlook; and IMF, African Department database.
Rising Commodity Prices Pose
Challenges
220
World Oil and Food Prices
(Index 2005QIV=100)
(US$/barrel)
200
Metals
(Left scale)
180
100
90
80
160
70
1
Oil
(Right scale)
140
Food
(Left scale)
120
60
100
50
80
40
60
30
40
20
I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV
2003
2004
2005
2006
2007
2008
2009
Source: IMF, World Economic Outlook.
1
Includes Cereal, Vegetable Oils, Meat, Seafood, Sugar, Bananas, and Oranges. Prices in US dollars.
Pass-through of Oil Prices
Sub-Saharan Africa: Pass-Through of Higher Gasoline,
Kerosene, and Diesel Prices, 2003-07
Diesel
(Ratio of change in the retail price to change in import price)
Gasoline
Kerosene
Oil-exporting countries
Oil-importing countries
0.0
0.2
0.4
0.6
0.8
Source: IMF, country desk data.
1.0
1.2
1.4
1.6
Food Price Inflation
14
Food Price Inflation in Sub-Saharan Africa
(y-o-y percent change)
Number of countries
12
Feb-08
Dec-07
10
Dec-06
8
6
4
2
0
[<1]
[1,5]
[5,10]
[10,15]
Food price inflation
[15,20]
[>20]
Spikes in oil and food prices are
building inflationary pressures
Sub-Saharan Africa: 12-month CPI Inflation1
11
(Percent)
10
9
8
7
Source: IMF, International Financial Statistics.
1
The February 2008 figure includes available data for 12 countries (67 percent of regional PPP GDP).
Jan-08
Oct-07
Jul-07
Apr-07
Jan-07
Oct-06
Jul-06
Apr-06
Jan-06
Oct-05
Jul-05
Apr-05
5
Jan-05
6
Terms of Trade in Sub-Saharan Africa
Terms of trade have improved for oil exporters.
325
300
(Index, 1997=100)
275
Sub-Saharan Africa
Oil-exporting countries
Middle-income countries
Low-income countries
Fragile countries
250
225
200
175
150
125
100
75
1997
1999
2001
2003
2005
2007 08
Sources: IMF, World Economic Outlook; and IMF, African
Department database.
Food Price Increases: What Can
and Should Be Done?
Policy responses depend on country
circumstances:
Temporary and targeted subsidies can help
the most vulnerable.
For permanent shocks, countries should aim
to put in place an efficient social safety net.
But second- best solutions may be needed.
Countries should seize the opportunity to
encourage agricultural production.
Direct price and export controls may have
unintended negative consequences.
In Response to Higher Food and
Fuel Prices, the Fund:
Is ready to provide financial support in
those countries where price shocks are
having a significant BoP impact.
Stands ready to provide policy advice:
fiscal policy implications, effects on
inflation, exchange rate management.
Supports increased aid to help the most
vulnerable groups.
35
0
Eritrea
Congo, Dem. Rep. of
Guinea
Central African Rep.
Ethiopia
Côte d'Ivoire
Zambia
Gabon
South Africa
Madagascar
Kenya
Namibia
Niger
Cameroon
WAEMU
Sierra Leone
Burundi
Senegal
Mali
Tanzania
CEMAC
Rwanda
Angola
Mauritius
Uganda
Cape Verde
Swaziland
Congo, Republic of
Equatorial Guinea
Nigeria
Sub-Saharan Africa:
Reserve Coverage for Terms of Trade Shocks, 2007
45
(Reserves to GDP, 75 percent of terms of trade shocks)
40
Reserves (Percent of GDP)
30
Bottom 25th percentile of terms of trade shock
25
20
15
10
5
Source: IMF, African Department database.
Total Government Debt in Sub-Saharan Africa
(Central Government, Percent of GDP)
100
90
75th percentile
Sub-Saharan
Africa median
80
1
70
Median
MDRI
countries
60
50
40
30
20
2000
25th percentile
2001
2002
1
2003
2004
2005
2006
2007
Source: IMF, World Economic Outlook; and IMF African Department database.
1
The band is calculated based on 88 developing countries. The lower and upper limits are
the 25th and 75th percentiles.
Central Government Social
Spending in Sub-Saharan Africa
Social spending has been sustained across countries.
10
(Health and education spending, percent of GDP)
8
2000–03
2004–07
6
4
2
0
Oil-exporting
countries
Middle-income
countries
Low-income countries
Fragile countries
Sources: IMF, World Economic Outlook; and IMF African Department database.
Sub-Saharan Africa: Doing Business, 2007
0
20
Mauritius
40
South Africa
Namibia
Botswana
(Ranking, 2007)
60
Kenya
80
Seychelles
Ghana
Ethiopia
100
Nigeria
Uganda
120
140
160
180
Malawi
Swaziland
Lesotho
Tanzania
Sierra Leone
Zambia
Gambia
Mozambique
Gabon
Madagascar
Rwanda
Liberia
Congo, Rep.
Guinea-Bissau
200
15
10
5
0
-5
(Change in ranking, 2006–07)
Source: World Bank, Doing Business Indicators, 2008.
-10
-15
-20
-25
Sub-Saharan Africa: Governance Ranking, 2000–06
40
2000
35
2006
30
25
20
15
10
5
0
Voice and
accountability
Political
stability
Government
effectiveness
Regulatory
quality
Rule of law
Source: World Bank Institute, World Governance Indicators, 2000–06.
Control of
corruption
Analytical Chapters
The REO also has three analytical chapters
Many African economies are adapting their
monetary frameworks to preserve hard-won
stabilization gains, anchor expectations, and
adapt to shocks (Chapter 2).
Private capital flows have overtaken official
aid as the main source of external finance for
sub-Saharan Africa (Chapter 3).
The power sector in sub-Saharan Africa
requires urgent attention (Chapter 4).
THE END