Sub-Saharan Africa
Regional Economic Outlook: Sub-Saharan Africa
April 2008
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Executive Summary also available in Português
The region's prospects continue to be promising, but global developments pose increased risks to the outlook. Growth in sub-Saharan Africa should again average about 6½ percent in 2008 with oil exporters leading the way; meanwhile, growth in oil importers is expected to taper off, though only modestly. With food and energy prices still rising, inflation is projected to average about 8½ percent this year for countries in the region, setting aside Zimbabwe. Risks in 2008 are tilted to the downside, but the region is better placed today to withstand a worsening of the global environment.
Contents
| Abbreviations | |
| Executive Summary | |
| I. | Overview |
| Main Developments in 2007 | |
| Macroeconomic Policies | |
| Outlook for 2008 and Risks | |
| Medium-Term Challenges: Unleashing the Private Sector and Reducing the Cost of Doing Business | |
| Appendix 1.1 | |
| II. | Monetary and Exchange Rate Policies in Sub-Saharan Africa |
| The Monetary and Exchange Rate Landscape | |
| Policy Challenges of Implementing Monetary and Exchange Rate Regimes in Sub-Saharan Africa | |
| Conclusions | |
| III. | Private Capital Flows to Sub-Saharan Africa: Financial Globalization's Final Frontier? |
| Recent Trends in Capital Flows to Sub-Saharan African Countries | |
| Factors Influencing Capital Flows in Sub-Saharan Africa | |
| Evidence from Country Case Studies | |
| Lessons and Policy Agenda for Sub-Saharan Africa | |
| Appendix 3.1 | |
| IV. | Africa's Power Supply Crisis: Unraveling the Paradoxes |
| Africa's Power Sector in International Perspective | |
| Africa's Acute Power Problems | |
| The Way Forward | |
| Statistical Appendix | |
| Sub-Saharan Africa: Country Groupings | |
| Data and Conventions | |
| List of Tables | |
| References | |
| Publications of the IMF African Department, 2004-08 | |
| Boxes | |
| 1.1. | Sub-Saharan Africa and the Global Slowdown |
| 1.2. | Economic Crisis in Zimbabwe |
| 1.3. | The Changing Nature of Public Debt in Sub-Saharan Africa |
| 1.4. | The Impact of High Oil Prices on Sub-Saharan Africa |
| 1.5. | Conflicts and Political Instability in Sub-Saharan Africa: Growth and Spillover Effects |
| 1.6. | Creditor Rights in Sub-Saharan Africa |
| 2.1. | Inflation Objectives for Sub-Saharan African Low-Income Countries |
| 2.2. | The Monetary Transmission Mechanism in Sub-Saharan Africa |
| 2.3. | Assessing Reserve Money Targeting in Sub-Saharan Africa |
| 2.4. | The Role of Money |
| 2.5. | Mozambique and Uganda: Adding Flexibility to Monetary Policy |
| 2.6. | Inflation Targeting in Ghana |
| 2.7. | Inflation Targeting: A Benchmark for Monetary Policy in Managed Floats |
| 2.8. | Analytic Frameworks for Monetary Policy in Low-Income Countries |
| 3.1. | Transition to Emerging Market Status: Where Does Africa Stand? |
| 3.2. | Domestic Determinants of Private Capital Inflows to Sub-Saharan African Countries |
| 3.3. | Are Capital Flows Good for Growth? |
| 3.4. | Recent Cross-Border Banking Investments |
| 3.5. | The Foreign Private Capital Capacity-Building Program |
| 4.1. | Introducing the Africa Infrastructure Country Diagnostic |
| 4.2. | Regional and Economic Effects of South Africa's Power Supply Crisis |
| Tables | |
| 1.1. | Sub-Saharan Africa: Selected Indicators, 2003-08 |
| A1.1. | Categorization of Sub-Saharan African Countries |
| A1.2. | Non-Oil Primary Fiscal Deficits, 2002-07 |
| 2.1. | De Jure Monetary Policy Frameworks in Sub-Saharan Africa |
| 3.1. | Private Capital Flows' Volatility, 2000-07 |
| 3.2. | Private FDI and Portfolio Inflows and Capital Market Development |
| A3.1. | Controls on Portfolio Investments and FDI in Selected African Countries |
| A3.2. | Capital Account Liberalization Process in Case-Study Countries |
| A3.3. | Case Study Countries: Challenges and Policy Responses |
| 4.1. | Emergency Power Generation in Sub-Saharan Africa |
| 4.2. | Private Participation Power Sector Transactions in Sub-Saharan Africa |
| 4.3. | Power Sector Expenditure |
| 4.4. | Annualized Power Sector Expenditure Requirements to 2015 |
| Figures | |
| 1.1. | A Comparison of Growth |
| 1.2. | Growth in Sub-Saharan Africa |
| 1.3. | Regional Dynamics of Growth |
| 1.4. | Contribution to GDP Growth |
| 1.5. | Growth Volatility |
| 1.6. | Real Per Capita GDP Growth |
| 1.7. | Sub-Saharan Africa: Oil Exporters |
| 1.8. | Sub-Saharan Africa: Trading Gains (Losses) |
| 1.9. | Inflation in Sub-Saharan Africa |
| 1.10. | Sub-Saharan Africa: External Current Account Balance |
| 1.11. | Commodity Prices in Sub-Saharan Africa |
| 1.12. | Three-Month Interbank Risks in Selected Emerging Market |
| 1.13. | Monetary Developments |
| 1.14. | Real Effective Exchange Rates in Sub-Saharan Africa |
| 1.15. | Real Effective Exchange Rates in the CEMAC and the WAEMU |
| 1.16. | Sub-Saharan Africa: Reserve Coverage |
| 1.17. | Credit to the Private Sector in Sub-Saharan Africa |
| 1.18. | Real Effective Exchange Rates in Sub-Saharan African Countries with a Floating Regime |
| 1.19. | CSub-Saharan Africa: 2007 Exchange Rate Adjustments and Current Account Balances |
| 1.20. | Central Government Revenues in Sub-Saharan Africa |
| 1.21. | CCentral Government Primary Expenditures in Sub-Saharan Africa |
| 1.22. | Central Government Social Spending in Sub-Saharan Africa |
| 1.23. | Low-Income Sub-Saharan Africa: Government Financing of Fiscal Deficits |
| 1.24. | Total Government Debt in Sub-Saharan Africa |
| 1.25. | Oil Prices and GDP Growth in Sub-Saharan Africa |
| 1.26. | Exports and Growth in Sub-Saharan Africas |
| 1.27. | Sub-Saharan Africa: Growth and Commodity Prices |
| 1.28. | Growth Prospects in Sub-Saharan Africa |
| 1.29. | Sub-Saharan Africa: Reserve Coverage for Terms of Trade Shocks, 2007 |
| 1.30. | Sub-Saharan Africa: Doing Business, 2007 |
| 1.31. | Sub-Saharan Africa: Global Competitiveness Index, 2007 |
| 1.32. | Sub-Saharan Africa: Governance Ranking, 2000-06 |
| 2.1. | Sub-Saharan Africa: Exchange Rate Distribution, 2005-07 |
| 3.1. | Sub-Saharan Africa: Capital Inflows, 2000-07 |
| 3.2. | Sub-Saharan Africa: Capital Inflows, 2000-07 (Annual Averages) |
| 3.3. | Sub-Saharan Africa: Total Private Capital Inflows, 2000-07 |
| 3.4. | Sub-Saharan Africa: Capital Inflows, Current Account, and Reserves, 2000-07 |
| 3.5. | Sequencing of Capital Account Liberalization |
| 3.6. | Selected Sub-Saharan African Countries: Composition of Capital Flows |
| 4.1. | Evolution of Power Infrastructure in Sub-Saharan Africa Relative to Other Regions |
| 4.2. | Electricity Prices and Consumption in Sub-Saharan Africa Relative to Other Regions |
| 4.3. | Countries Affected by Acute Power Sector Crises in 2007 |
| 4.4. | Drivers of Operating Costs for Sub-Saharan African Power Systems |
| 4.5. | Electricity Costs and Revenues by Type of Power System (US$/kwh) |
| 4.6. | Average Power Sector Revenue and Various Cost Benchmarks |
| 4.7. | Electricity Service Coverage in Sub-Saharan Africa |
| 4.8. | Electricity Service Expenditure in Sub-Saharan Africa |
| 4.9. | Evaluation of Power Sector Reform |
| 4.10. | State-Owned Enterprise Governance Characteristics |
| 4.11. | Frequency Distribution of Power Sector Efficiency Indicators |
| 4.12. | Hidden Costs of Power Sector Inefficiency |
| 4.13. | Long-Term Trends in External Finance for the Sub-Saharan African Power Secto |