Economic recovery continues to strengthen in Sub-Saharan Africa: IMF

Policies should focus on strengthening the foundations for higher and more resilient growth which helps create jobs for a growing labor force.

The International Monetary Fund (IMF) today welcomed the continued recovery in activity in sub-Saharan African resource-intensive countries and sustained strong growth in most other countries. The IMF urged, however, sub-Saharan African countries to reduce underlying vulnerabilities and strengthen the foundations for sustained high growth. According to its latest Regional Economic Outlook for sub-Saharan Africa report: “economic growth is picking up and macroeconomic outcomes have strengthened but more needs to be done to decisively shield the recovery against risks arising from both domestic and external shocks”.

“Growth in sub-Saharan Africa is expected to increase from 2.7 per cent in 2017 to 3.1 per cent in 2018 and 3.8 per cent in 2019,” said Abebe Aemro Selassie, Director of the IMF’s African Department. He added that “growth is set to improve most notably for oil exporters, while non-resource intensive countries continue to grow strongly, with quite a few growing at 6 per cent or more.”

Underlying vulnerabilities need to be addressed. Mr Selassie stressed that “while there has been progressing in narrowing fiscal deficits, more focus is needed to raise revenues to support continued development spending and to service debt.”

Looking forward, Mr Selassie noted that, “the global economy is entering a period of unusually elevated policy uncertainty with significant downside risks. The external environment is expected to become less supportive and challenges relating to rapid advances in technology and climate change are growing. Sub-Saharan African countries need to better position themselves to deliver growth that is more resilient and capable of creating enough jobs to fully harness its demographic dividend.”

Policy reforms should focus on delivering growth that creates 20 million jobs per year needed to absorb new entrants into the labour market. Policy actions include deepening trade and financial integration (including in the context of the African Continental Free Trade Area), removing market distortions, improving the efficiency of public spending, promoting digital connectivity and a flexible education system, and fostering an environment that is conducive to private investment and risk-taking.