Africa APPG- IMF's Regional Economic Outlook for Sub-Saharan Africa (October 2014)
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These are the slides from a presentation made by the Africa Deputy Director of the IMF, Roger Nord to the Africa All Party Parliamentary Group in UK Parliament on 8th December 2014. This is a summary of the IMF's Regional Economic Outlook for Sub-Saharan Africa (October 2014). Available here http://bit.ly/1x52mAc Follow the Africa APPG on Twitter @AfricaAPPG For more information on the Africa APPG visit- http://bit.ly/1SSrIcR and to sign up to the APPG public mailing list register here- http://bit.ly/1oF83Cp The Africa APPG is supported by the Royal African Society.
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Africa APPG- IMF's Regional Economic Outlook for Sub-Saharan Africa (October 2014)
- 1. Africa – Opportunities and Challenges Roger Nord International Monetary Fund London, December 2014
- 2. 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
- 3. 6.6 5.1 0 1 2 3 4 5 6 7 1980-1989 1990-1999 2000-2008 2009-2013 Percent 2.6 2.2 6.6 5.1 0 1 2 3 4 5 6 7 1980-1989 1990-1999 2000-2008 2009-2013 Percent Africa has seen strong growth since the late 1990s Sub-Saharan Africa: Average Real GDP Growth, 1980-2013
- 4. 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 RealGDPpercapita(Index,Takeoff=100) Years after takeoff India, 1982 ASEAN-5, 1973 Vietnam, 1990 Uganda, 1986 Tanzania, 1995 Mozambique, 1992 Sources: IMF, World Economic Outlook.
- 5. 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 Index1995=100 SSA Resource Intensive SSA Non Resource-Intensive SSA LICs Resource-Intensive SSA LICs Non Resource-Intensive
- 6. 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 BurkinaFaso Ethiopia Tanzania Mozambique Rwanda Uganda Othernonresource- intensiveLICSand fragilecountries PercentofGDP 2000 2013
- 7. … 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 BurkinaFaso Ethiopia Tanzania Mozambique Rwanda Uganda Othernonresource- intensiveLICSand fragilecountries PercentofGDP 1995 2013
- 8. … 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 PercentofGDP Other nonresource-intensive LICs and fragile countries, investment National saving Investment
- 9. 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.
- 10. 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
- 11. 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 RealGDPgrowthinpercent Advanced countries Emerging countries
- 12. 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 Percentagechange 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 Percentagechange Oil Exporters Middle-income countries Low-income countries Fragile countries
- 13. 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 PercentofGDP Oil exporters Middle-income countries Low-income countries Fragile countries
- 14. 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
- 15. 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 PercentofGDP Interquartile Range Median Sub-Saharan Africa
- 16. … 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 PercentofGDP 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 PercentofGDP 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.
- 17. Ebola is having a devastating impact in directly affected countries
- 18. 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 USDollarsperbarrel 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 Percentagechange
- 19. The impact on SSA countries will depend on their net oil exporter (or importer) position. -2 0 2 4 2014 2015 2016 PercentofGDP Oil at $100 per barrel (Oct 2014 WEO) Oil at $75 per barrel -8 -6 -4 -2 2014 2015 2016 PercentofGDP 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
- 20. 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 Percent 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)
- 21. 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
- 22. Medium-term Challenges : Infrastructure - Energy Source: World Development Indicators and IMF staff estimates. 100 500 900 1300 1700 2100 2500 2900 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 kWhpercapita East Asia & Pacific Latin America & Caribbean Middle East & North Africa South Asia Sub-Saharan Africa Electricity Production 22
- 23. 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 5 521 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
- 24. 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
- 25. 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
- 26. There are a variety of lending and non- lending programs 26 ECF PSI RCF EFF Surveillance Programs Near program
- 27. 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)
- 28. … 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 Number BillionsofU.S.Dollars2 Non-concessional lending Concessional lending Number of new PRGT arrangements (right axis)
- 29. AFRITACs: Technical Assistance is an important service provided by the Fund 29 East Central West South West 2
- 30. Thank You 30