AFRICA
Sub-Saharan Africa on growth track

Sub-Saharan Africa is experiencing its best period of sustained growth since independence from colonial rule, chalking up 6.8 percent last year but a global slowdown is a risk to further progress, the IMF said Wednesday.

The International Monetary Fund (IMF), in its biannual survey of the world economy, said regional growth was supported by domestic demand, improvements in macroeconomic stability and economic reforms in most countries.

Inflation was well contained and together this made some countries "increasingly attractive as destinations for private capital inflows," which hit record levels last year.

"Against this background, growth in 2008 and 2009 is projected to slow only modestly from the pace recorded in 2007," to 6.6 and 6.7 percent, it said.

A rise in global commodity prices

A sustained rise in global commodity prices, led by oil, in recent years has helped many countries but manufacturing too has picked up and "now represents a much larger share of regional (output) than commodity exports," the IMF said.

While commodity price shocks remain a threat, "the rising role of manufacturing exports ... presents an opportunity for a move up the value chain and greater diversification of the economy away from primary exports."

At the same time, "a greater share of exports (is) now going to other emerging and developing economies although advanced economies still account for three-quarters of all exports," the IMF noted.

Despite this progress and the region's greater overall resilience, the "risks remain to the downside," the IMF cautioned.

Sharper-than-expected slowdown

"The region remains sensitive to developments in advanced economy trading partners, especially western Europe," it said.

"A sharper-than-expected slowdown ... that reduces the demand for the region's principal exports is still the key source of risk for the region's commodity exporters, along with the related risk of weaker commodity prices.

"Tighter global financial market conditions could also slow the pace of capital inflows and investment into the region. In a number of countries, political and security risks remain important."

The IMF said the region's main policy challenges were therefore "to maintain progress toward increasing integration with the global economy and to reduce poverty in the context of a less-friendly global environment."

AFP

FEEDBACK | CONTACTS | PRESS RELEASES