Productive Capacities, Economic Vulnerability and Growth Volatility in Sub-Saharan Africa

August 2, 2024

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Format: Chicago

Aminou Yaya. Productive Capacities, Economic Vulnerability and Growth Volatility in Sub-Saharan Africa, (USA: International Monetary Fund, 2024) accessed September 14, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Sub-Saharan Africa (SSA) countries, like most developing countries, face major challenges to achieve strong, sustainable, and inclusive growth with the view to reduce significantly persistent poverty and inequality. Many of these challenges results from a high level of economic vulnerability due to simultaneous shocks, notably the Covid-19 pandemic, climate change and the multiplicity of armed conflicts. Hence the need to study policies and means of strengthening economic resilience to shocks. This paper analyzes the effects of productive capacities on the volatility of economic growth in SSA countries when faced with significant vulnerability. The study covers the period 2000-2018 for 43 SSA countries. Using Generalized Method of Moments (GMM), the results show that economic vulnerability contributes to growth volatility in SSA. However, this effect varies according to the performance of productive capacities. Countries with high productive capacities have greater opportunities to mitigate the effect of economic vulnerability on growth volatility. Some specific dimensions of productive capacities (Institutions, ICT) seem to matter more than others. The results of this study provide important recommendations to policy makers.

Subject: Expenditure, Export diversification, Exports, Human capital, International trade, Labor

Keywords: Africa, Caribbean, Economic vulnerability, Estimation methodology, Export diversification, Exports, Growth volatility, Human capital, I. sensitivity, Productive capacities, Real GDP growth in SSA, Sub-Saharan Africa

Publication Details

Pages:

46
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2024/169
Stock No:

WPIEA2024169
ISBN:

9798400286308
ISSN:

1018-5941

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