[Skip to content]

Public Finance International
News and comment on global public financial management
.

Sub-Saharan Africa set to sustain growth, says IMF

By Nick Mann | 14 May 2012

Sub-Saharan Africa’s economic output will increase by 5.5% this year as new resource production in many countries and a recovery in Western Africa help to boost the region’s performance, the International Monetary Fund said today.

But this forecast was subject to ‘substantial’ downside risks, the IMF added. In its Regional economic outlook, the fund said the biggest threats would come from renewed financial stresses in the eurozone and the potential for geopolitical uncertainties to cause a surge in global oil prices.

The region recorded 5% growth last year despite drought in the Sahel, conflict in Ivory Coast and weakness in many of South Africa’s European trading partners and the IMF said this momentum was expected to be maintained in 2012.

Inflation is also expected to moderate, in particular, in countries in eastern Africa that have tightened monetary policy.

Antoinette Monsio Sayeh, director of the IMF's African department, said: A weaker global economy would, of course, slow the pace of growth in sub-Saharan Africa. However, the resilience of the region’s economies over the course of the current global economic crisis provides confidence that solid growth can still be recorded under less favourable external conditions.’

The IMF stressed the variation in performance across the region, which it said should influence how countries respond to the current economic situation. In South Africa, the region’s largest economy, growth is expected to slow to below 3%, while the second largest economy, Nigeria, is forecast to maintain growth around 7%.

‘There are no “one-size-fits-all” policy recommendations,’ said Sayeh. ‘In countries where output growth is now strong and where budget deficits have widened significantly over the course of the crisis, governments should be taking the opportunity to rebuild fiscal positions and contain debt build-ups.

‘But fiscal consolidation would be premature in countries where growth is weak and links to Europe are strong, unless borrowing capacity is eroded. Countries in the process of reducing elevated inflation rates will need to maintain monetary policy on the tight side until there is clear evidence of progress.’

Spacer

Share this article here:


Blog

  • USA: back to which schools?
    OECD research shows that the gap in educational achievement of American schoolchildren is widening not narrowing. Underlying this problem is a system of growing segregation...
  • Jumpstarting the eurozone economy
    The stagnating eurozone economy needs policy action. Its leaders should agree to coordinated tax cuts, extension of budget deficit targets and issuance of long-term public...
  • Italy's recession: new or same old?
    Italy is reported to have slipped back into recession. But this is based on the criterion of two successive quarters of negative growth. There are other ways of measuring...

Configure your Portal

Public Finance International is created in partnership with:

CIPFA logo
Public Finance logo
PFM Jobs logo

Latest vacancies

Twitter feed
Comments
Please enter your comments below
Fill out the all the boxes and click the 'Submit comments' button to make a comment on this page
*Comments are added to the bottom of the page. They are moderated and will not be published until approved by the Public Finance International team. They may be edited.