Regional Economic Outlook for sub-saharan Africa. African Department International Monetary Fund November 30, 2017

Transcription

1 Regional Economic Outlook for sub-saharan Africa African Department International Monetary Fund November 3, 217

2 Outline 1. Sharp slowdown after two decades of strong growth 2. A partial and tentative policy response 3. Near-term macroeconomic challenge Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 4. Medium-term prospects remain strong Demographic dividend Technology facilitating stronger catch-up growth 2

3 Since the mid 199s, most sub Saharan African countries have been registering high growth rates Percent 3

4 Important progress in human development 1,2 1, Per 1, live births Per 1, births Maternal mortality Infant mortality Developments in sub-saharan Africa 4

5 Three broad factors have facilitated the strong growth Better policies and institutions Capital Inflows High Commodity Prices 5

6 But in 216 growth slumped sharply and only a modest recovery is expected 8 Real GDP growth, percent Sub-Saharan Africa Sub-Saharan Africa excluding Nigeria and South Africa proj. 218 proj. 219 proj. Developments in sub-saharan Africa 6

7 The recovery is not sufficient to raise per capita growth in many countries % 43% Number of countries Percent of population Developments in sub-saharan Africa 7 Negative real GDP Positive real GDP per capita growth per capita growth

8 Oil exporting economies have been hit the most 8 6 Median real GDP growth, percent Oil exporters (8 countries) Other resource-intensive countries (15 countries) Non-resource-intensive countries (22 countries) proj. 218 proj. 219 proj. Developments in sub-saharan Africa 8

9 Outline 1. Sharp slowdown after two decades of strong growth 2. A partial and tentative policy response 3. Near-term macroeconomic challenge Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 4. Medium-term prospects remain strong Demographic dividend Technology facilitating stronger catch-up growth 9

10 Easier financing conditions have brought frontier economies back to the market Sub-Saharan African frontier market international bond spreads, basis points 1,1 1, International sovereign bond issuances, bllions of US dollars Sub-Saharan African non-oil exporters Sub-Saharan African oil exporters 2 Jan-11 Sep-12 May-14 Jan-16 Sep-17 Developments in sub-saharan Africa :Q2 1

11 Exchange rate pressures have eased in many countries the case of Nigeria Nigerian exchange rates, Naira per US dollar Interbank market Parallel rate Official Rate 15 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Developments in sub-saharan Africa 11

12 Fiscal deficits are stabilizing Overall fiscal balance, percent of GDP Oil exporters Interquartile range Median Other resourceintensive countries Interquartile range Median Non-resourceintensive countries Interquartile range Median Developments in sub-saharan Africa 12

13 Outline 1. Sharp slowdown after two decades of strong growth 2. A partial and tentative policy response 3. Near-term macroeconomic challenge Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 4. Medium-term prospects remain strong Demographic dividend Technology facilitating stronger catch-up growth 13

14 Debt stocks have risen throughout the region Oil exporters Other resourceintensive countries Non-resourceintensive countries 7 6 Interquartile range Median 7 6 Interquartile range Median 7 6 Public debt, percent of GDP Interquartile range Median Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 14

15 Driven by large fiscal deficits and depreciation Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 15

16 Debt service costs have increased Total debt service, percent of revenue Interquartile range Sub-Saharan Africa median Oil exporters median proj. Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 16

17 Median public debt, percent of GDP Fiscal consolidation plans need to be implemented Oil exporters Baseline Other resourceintensive countries Baseline Non-resourceintensive countries Baseline Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 17

18 Fiscal consolidation plans need to be implemented Median public debt, percent of GDP Oil exporters Baseline Other resourceintensive countries Baseline Non-resourceintensive countries Baseline Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 18

19 Fiscal consolidation plans need to be implemented Median public debt, percent of GDP Oil exporters No adjustment Baseline Other resourceintensive countries No adjustment Baseline Non-resourceintensive countries No adjustment Baseline Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 19

20 Fiscal multipliers are lower in SSA Impact on GDP growth of a 1 pp increase in 1.2 Investment-to-GDP ratio Consumption-to-GDP ratio Revenue-to-GDP ratio Real GDP growth, percent Years Years Years Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 2

21 Significant potential for raising tax revenues Tax ratio, percent of GDP Actual tax Tax potential Oil exporter Resourceintensive countries Non-resource intensive countries Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 21

22 Diversification offers a path to growth GDP per capita growth, percent SSA oil exporters SSA non-resource-intensive BWA SSA other resource-intensive Other countries Average export diversification, (Higher values = less diversification) UGA GNQ Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 22

23 Usual factors important for diversification Income Inequality (Gini) Residual of export diversification 2-2 SSA Non-SSA Residual of Gini Access to Electricity Residual of export diversification SSA Non-SSA Residual of access to electricity, percent 23

24 Usual factors. (cont) Credit to private sector Ease of doing business Residual of export diversification SSA Residual of credit to private sector, percent Residual of export diversification SSA Residual of ease of doing business 24

25 Getting the policy mix right and playing to your strengths Botswana: Expanding along the value chain Built on an existing position in the diamond industry Helped to create positive spillovers to supporting sectors Strong record of good governance Prudent economic management Uganda: Moving into manufacturing Expanded from agro-commodities to agro-processing Industrial clusters supported exports of light manufacturing Sustained macroeconomic stability Expanding regional trade supported export growth Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 25

26 Outline 1. Sharp slowdown after two decades of strong growth 2. A partial and tentative policy response 3. Near-term macroeconomic challenge Addressing debt vulnerabilities Emphasis on revenue mobilization Fostering economic diversification 4. Medium-term prospects remain strong Demographic dividend Technology facilitating stronger catch-up growth 26

27 Globally, working age population is projected to decline sharply in coming years 3. Percent World World excluding Sub-Saharan Africa

28 By around 23, half the increase in global work force will come from sub Saharan Africa Change in Year Old Population China Rest of world Sub-Saharan Africa Millions of persons

29 FinTech for financial inclusion In some countries, mobile account growth outpaced bank account 7 Countries with more mobile accounts than bank accounts (% age 15+) in Sub-Saharan Africa, , Central Africa Southern Africa Mobile account Bank account 1, 8, Western Africa Eastern Africa 3 6, 2 4, 1 2, Dec-12 Dec-13 Dec-14 Source: Global Findex, World Bank Source: GSMA Mobile Money

30 Mobile account (% age 15+) in Sub-Saharan Africa, 214 Kenya Uganda Tanzania Cote d'ivoire Zimbabwe Botswana Rwanda South Africa Ghana Zambia Mali Namibia Congo, Dem. Rep. Gabon Senegal Sierra Leone Madagascar Niger Malawi Burkina Faso Nigeria Benin Congo, Rep. Cameroon Guinea Togo Mauritius Burundi Source: Global Findex, World Bank

31 Thank you! The online edition of the Regional Economic Outlook for sub-saharan Africa is now available online at 31