IMF projects positive 2013 economic outlook for sub-Saharan Africa

The International Monetary Fund (IMF) in its May 2013 Regional Economic Outlook titled “Building Momentum in a Multi-Speed World” reveals that following a year of strong growth in 2012 the near-term outlook for sub-Sahara Africa (SSA) remains broadly positive, with growth projected to accelerate modestly to around 5.5% in 2013-14.

The positive outlook however is conditional on the implementation of sound macroeconomic policies, although the necessary policy mix differs across countries.

The report envisages that the region’s inflation will decline further to below 6% by end-2014, reflecting the expectation of moderating non-oil commodity prices and maintenance of appropriate monetary policy.

“Given the presence of risk, fast growing countries with low policy buffers should give priority to rebuilding buffers to handle adverse external shocks, while safeguarding long-term growth and developmental needs,” the Director of IMF’s African Department, Ms. Antoinette Sayeh says.

Ms. Sayeh notes that, the main downside risks to the outlook relates to uncertainties in the global economy, but possible adverse shocks would likely not have a large effect on the region’s overall performance.

However, “countries with limited policy buffers and reliant on a narrow range of export commodities, or more directly exposed to sources of risk, could experience more severe adverse effects,” she adds.

The report also shows that economic growth in sub-Saharan Africa remained strong in 2012, with regional GDP increasing by 5% indicating that growth was particularly strong among oil exporters and low-income countries, while middle-income countries with closer ties to Europe saw a deceleration.

By Dorcas Appiah