Africa APPG- IMF's Regional Economic Outlook for Sub-Saharan Africa (October 2014)
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Transcript of Africa APPG- IMF's Regional Economic Outlook for Sub-Saharan Africa (October 2014)
Africa – Opportunities and Challenges
Roger Nord
International Monetary Fund
London, December 2014
Outline
• The Growth Take-Off in Sub-Saharan
Africa
• The Economic Outlook for SSA in
2015
• Short-term Risks and Medium-term
Challenges
• The IMF and Africa
2
6.6
5.1
0
1
2
3
4
5
6
7
1980-1989 1990-1999 2000-2008 2009-2013
Per
cent
2.6 2.2
6.6
5.1
0
1
2
3
4
5
6
7
1980-1989 1990-1999 2000-2008 2009-2013
Per
cent
Africa has seen strong growth since the late 1990s
Sub-Saharan Africa: Average Real GDP Growth, 1980-2013
4
Excludes China for presentation purposes, as China's growth is much higher than that of the
other countries. ASEAN 5 = Indonesia, Malaysia, the Philippines, Singapore and Thailand.
50
100
150
200
250
300
350
400
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39
Rea
l GD
P p
er c
apita
(Ind
ex, T
akeo
ff =
100
)
Years after takeoff
India, 1982 ASEAN-5, 1973 Vietnam, 1990 Uganda, 1986 Tanzania, 1995 Mozambique, 1992
Sources: IMF, World Economic Outlook.
Growth has not been driven by natural resources
GDP per Capita
75
100
125
150
175
200
225
1990 1993 1996 1999 2002 2005 2008 2011
Ind
ex 1
99
5 =
10
0
SSA Resource Intensive
SSA Non Resource-Intensive
SSA LICs Resource-Intensive
SSA LICs Non Resource-Intensive
Good economic policies have resulted in
deeper financial sectors …
6
Sub-Saharan Africa Sample Countries: Credit to the Private Sector
Sources: IMF, African Department database; and IMF, World Economic Outlook database.
0
5
10
15
20
25
30
35
Bur
kina
Fas
o
Eth
iopi
a
Tanz
ania
Moz
ambi
que
Rw
anda
Uga
nda
Oth
er n
onre
sour
ce-
inte
nsiv
e LI
CS
and
fr
agile
cou
ntrie
s
Per
cent
of G
DP
2000 2013
… broader tax bases …
7
Sub-Saharan Africa Sample Countries: Tax Revenue, 1995 and 2013
Source: IMF, World Economic Outlook database.
0
5
10
15
20
25
Bur
kina
Fas
o
Eth
iopi
a
Tanz
ania
Moz
ambi
que
Rw
anda
Uga
nda
Oth
er n
onre
sour
ce-
inte
nsiv
e LI
CS
and
fr
agile
cou
ntrie
s
Per
cent
of G
DP
1995 2013
… and rising investment
8
Sub-Saharan Africa Sample Countries: Saving and Investment, 1995–2013
Source: IMF, World Economic Outlook database.
0
5
10
15
20
25
30
35
Per
cent
of G
DP
Other nonresource-intensive LICs and fragile
countries, investment
National saving
Investment
Political and structural reforms have also helped
9
-1.2
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
1996 2000 2003 2005 2007 2009 2011
Control of Corruption
-1.2
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
1996 2000 2003 2005 2007 2009 2011
Government Effectiveness
-1.2
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
1996 2000 2003 2005 2007 2009 2011
Political Stability
-1.2
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
1996 2000 2003 2005 2007 2009 2011
Regulatory Quality
Other nonresource-intensive LICs and fragile countries
Sample countries
Source: IMF staff estimates based on World Bank, Worldwide Governance Indicators.
Note: LIC signifies low-income country. The composite measures of governance of the Worldwide Governance Indicators are expressed in
units of a standard normal distribution, with mean zero, standard deviation of one, and running from approximately -2.5 to 2.5, with higher
values corresponding to better governance.
Outline
• The Growth Take-Off in Sub-Saharan
Africa
• The Economic Outlook for SSA in
2014
• Short-term Risks and Medium-term
Challenges
• The IMF and Africa
10
Global growth is expected to remain subdued
Advanced and Emerging Economies: GDP growth 2005–16
-6
-4
-2
0
2
4
6
8
10
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Rea
l GD
P g
row
th in
per
cent
Advanced countries Emerging countries
Growth in Sub-Saharan Africa to remain strong
12
Selected Regions: Real GDP Growth 2007–14
Sub-Saharan Africa: Real GDP Growth, 2007–14
2007 2008 2009 2010 2011 2012 2013 2014 2015
-2
0
2
4
6
8
10
12
Per
cent
age
chan
ge
World Developing Asia Sub-Saharan Africa
2007 2008 2009 2010 2011 2012 2013 2014 2015
-4
-2
0
2
4
6
8
10
12
14
Per
cent
age
chan
ge
Oil Exporters Middle-income countries Low-income countries Fragile countries
Rising investment remains driver of growth
13
Sub-Saharan Africa: Investment, 2010–14
14
16
18
20
22
24
26
28
30
2010 2011 2012 2013 2014
Per
cent
of G
DP
Oil exporters
Middle-income countries
Low-income countries
Fragile countries
Outline
• The Growth Take-Off in Sub-Saharan
Africa
• The Economic Outlook for SSA in
2014
• Short-term Risks and Medium-term
Challenges
• The IMF and Africa
14
And although public debt to GDP ratios for
the whole region are broadly stable …
Sub-Saharan Africa: Public Sector Debt 2004-2013
31.5 37.9
0
20
40
60
80
100
120
140
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Per
cent
of G
DP
Interquartile Range Median
Sub-Saharan Africa
… they are rising more rapidly in market access
economies than in the rest of the region
Sub-Saharan Africa: Public Sector Debt 2004-2013
27.5
41.3
0
20
40
60
80
100
120
140
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Per
cent
of G
DP
Interquartile Range
Median
Market Access Economies
41.0 37.5
0
20
40
60
80
100
120
140
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Per
cent
of G
DP
Interquartile Range
Median
Rest of the Region
Note: Market access economies include Angola, Ghana, Kenya, Mauritius,
Nigeria, Rwanda, Senegal, South Africa, Tanzania, Uganda, and Zambia.
Ebola is having a devastating impact in
directly affected countries
Since the summer, oil and commodity prices have
declined significantly…
60
70
80
90
100
110
120
Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14
US
Dol
lars
per
bar
rel
WTI
Brent
Oil Price Spots, June 2014–Present
Selected Commodity Prices, Change since
June 2014 to Present
-40
-35
-30
-25
-20
-15
-10
-5
0
5
10
Per
cent
age
chan
ge
The impact on SSA countries will depend on
their net oil exporter (or importer) position.
-2
0
2
4
2014 2015 2016
Per
cent
of G
DP
Oil at $100 per barrel (Oct 2014 WEO)
Oil at $75 per barrel
-8
-6
-4
-2
2014 2015 2016
Per
cent
of G
DP
Oil at $100 per barrel (Oct 2014 WEO)
Oil at $75 per barrel
Sub-Saharan Africa: External Balance, 2014-2016
Oil Exporters Rest of Region
Medium-term Challenge: Inclusiveness
Source: International Monetary Fund, Regional Economic Outlook for Sub-Saharan Africa, October 2011
Per Capita GDP Growth and Consumption Growth of the Poorest Quartile
20
-3
-2
-1
0
1
2
3
4
5
6
7
Cameroon Ghana Mozambique Rwanda Tanzania Uganda Zambia
Per
cent
GDP Growth per Capita Per Capita Consumption Growth of the Poorest quartile Per capita consumption growth of all households Per Capita Consumption Growth of the Poorest quartile (using regional price deflators)
Medium-term Challenges : Infrastructure
Normalized units
Sub Saharan Africa-Low Income Countries
Other Low Income Countries
Paved Road Density 31 134
Total road density 137 211
Main line density 10 78
Mobile density 55 76
Internet density 2 3
Generation Density 37 326
Electricity Coverage 16 41
Improved water 60 72
Improved sanitation 34 51
21
Medium-term Challenges : Infrastructure - Energy
Source: World Development Indicators and IMF staff estimates.
100
500
900
1300
1700
2100
2500
2900
1975
19
76
1977
19
78
1979
19
80
1981
19
82
1983
19
84
1985
19
86
1987
19
88
1989
19
90
1991
19
92
1993
19
94
1995
19
96
1997
19
98
1999
20
00
2001
20
02
2003
20
04
2005
20
06
2007
20
08
2009
kWh
per
capi
ta
East Asia & Pacific Latin America & Caribbean Middle East & North Africa South Asia Sub-Saharan Africa
Electricity Production
22
Demographic Dividend:
Challenge or Opportunity?
I
13 11 9 8 9 13 15 18 24
35
64 65 64
58 56
61 61 60 56
46
7
9 9 8 8 7
5 7
5 5 5 5 5 21 21 22 25 22 12 10 9 8 7
0
20
40
60
80
100
1750 1800 1850 1900 1950 2000 2012 2025 2050 2100
Europe
North America
Latin America
Asia
Africa
23
Outline
• The Growth Take-Off in Sub-Saharan
Africa
• The Economic Outlook for SSA in
2014
• Short-term Risks and Medium-term
Challenges
• The IMF and Africa
24
IMF Involvement in Africa
• 20 countries with IMF-supported programs:
ECF (12); RCF (2); PSI (5); EFF (1).
• Capacity building: 40 percent of IMF TA;
AFRITACs; Africa Training Center
• Regional Economic Outlook
• Policy advice: natural resource mgt;
financial sector stability; regional
integration
There are a variety of lending and non-
lending programs
26
ECFPSIRCFEFF
SurveillanceProgramsNear program
The stock of IMF lending to SSA stood
at $7.5 billion at end 2013 …
1087
6441
157 SBA/EFF
ECF, SCF, ESF
RCF
Sub-Saharan Africa: Credit Outstanding
(Millions of U.S. dollars, as of December 2013)
… but IMF lending to Africa has fallen from the
2009 peak
28
Sub-Saharan Africa: IMF Lending Commitments1, 2000-2014
Source: IMF, Finance Department 1 Includes concessional lending (PRGF/ECF, EPCA & ENDA, ESF and RCF) and non-concessional lending (SBA/EFF). Excludes arrears-related lending
(Liberia). updated through September 2014 . 2 Converted into U.S. dollars using the average exchange rate for each year.
0
2
4
6
8
10
12
14
0
1
2
3
4
5
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Num
ber
Bill
ions
of U
.S. D
olla
rs2
Non-concessional lending
Concessional lending
Number of new PRGT arrangements (right axis)
AFRITACs: Technical Assistance is an
important service provided by the Fund
29
East
Central
West
South
West 2
Thank You
30