|Figure 1: Per-capita gross domestic product at current prices in 2007, 2008 and 2009 (in EUR) |
|Figure 2: GDP at current prices, development 2000-2009 (2000=100)
Having demonstrated resilience during
the global financial crisis, Africa’s emerging market
countries have good prospects for 2011, according to the
IMF (International Monetary Fund).
Foreign direct investment, particularly from Africa’s
new trading partners in Asia, is expected to strengthen
and demand for African bonds is set to increase.
The IMF says
such diversification of financing sources for
much-needed public investment would be welcome, but
would also require a coherent macroeconomic policy and
foreign exchange regime to cope with capital flow
surges, especially if they have historically been prone
to debt problems.
More private capital ahead
The IMF says
advanced-industrial-country policy measures, albeit
needed to shore up their own growth prospects, have led
to historically low yields and, in some cases,
significant increases in public debt. These trends,
coupled with strong growth prospects in many emerging
markets, have led investors to look further afield.
Economic analysts, investors, and the media are
increasingly able to single out countries in sub-Saharan
Africa with good track records and prospects that
inspire investor confidence, such as those globalization
Steven Radelet has dubbed
“emerging Africa” (see Box
As discussed in the
Regional Economic Outlook for sub-Saharan Africa in October
2010, African trade is already shifting toward the dynamic emerging
markets, notably China. Trade between China and Africa has been
expanding rapidly, growing by an average of 30 percent a year over
the past decade, and likely exceeded $100bn in 2010.
The IMF says these new
partners will continue to show strong demand for goods that Africa
can supply, and will be alert for opportunities to invest directly.
For Africa, the key priorities will be negotiating fair and durable
deals with big multinational firms and making the best use of the
revenue windfalls, especially when the resources are nonrenewable
(see Box 2 below).
The EU's statistics office,
Eurostat, and the statistics unit of the African Union (AU) Commission have
produced a set of
Africa-EU economic indicators.
|Box 1: Radelet’s 17 emerging
that posted per capita economic growth of more than 2% for
the period 1996–2008:
Sao Tome and Principe
■ Many of these countries are
considering tapping international capital markets to fund ambitious
public spending programs.
Eurostat/AU say that in recent
years, African GDP has progressed at a faster pace than in the EU, but this has
been offset by a comparatively high increase in consumer prices. Furthermore,
the global economic crisis had a considerable impact on GDP and trade in goods
Since 2004, the value of extra-EU trade in goods with Africa has risen
substantially, with imports (mainly energy products) consistently higher than
exports (especially machinery and transport equipment). The economic crisis
abruptly ended this trend: in 2009, the value of EU-27 imports from Africa
decreased by 33% and EU-27 exports to Africa fell by nearly 10%, resulting in a
near trade balance.
The report says that in 2009, Libya was the foremost African exporter of goods
to the EU-27, and South Africa was the main destination for EU-27 exports to
Africa. The EU-27’s small trade surplus observed in the trade of services in
2007 increased to €3.7bn in 2008.
Between 2000 and 2008, nominal GDP growth in Africa as a whole increased at a
faster pace than that of the European Union. In 2008, total GDP in the EU-27
stood 36 index points above its base year value (2000), while that of Africa
progressed by 67 index points over the same period. Due to the global economic
crisis, GDP in the EU-27 fell by 8 index points in 2009. The corresponding 2009
figure for Africa as a whole is not yet available.
The report says obviously, aggregate data mask large disparities with regard to
the ‘weight’ of the individual countries. The largest contributors to Africa’s
GDP are South Africa, Nigeria, Egypt, Algeria, Morocco and Libya. However, the
picture changes considerably when considering GDP per capita.
GDP in Africa stood 67% higher in
2008 than it did in 2000. The average annual growth rate (AAGR) between 2000 and
2008 amounted to13.0%. The corresponding AAGR (nominal growth) for the EU-27 was
3.9%, with GDP standing 36% higher in 2008 than in 2000.
The IMF says that notwithstanding
the rapid gains of the last decade, poverty, often extreme, remains pervasive in
sub-Saharan Africa. In far too many places, more rapid growth has not yet
translated into local employment opportunities, a better social safety net, or a
higher quality of life. In addition, weak governance, limited administrative
capacity, or political instability (and even outright conflict) have suppressed
or reversed per-capita-GDP gains.
|Box 2: Make the most of windfalls
Revenue authorities and finance officials of
18 African countries gathered in Kampala, Uganda in mid-2010 for an
in-depth, two-day conference on oil revenue management, cosponsored by
Norway’s Oil for Development program. At the conference, the IMF Fiscal
Affairs Department (FAD) launched
The Taxation of Petroleum and Minerals: Principles, Problems and
Practice, a handbook that provides analysts and decision-makers the
essential foundations of resource taxation.
Analysis of Resource Industries (FARI) Initiative has a unique
collection of natural resource laws and agreements from around the
world, covering a wide variety of commodities. FARI experts use this
knowledge to construct output/price/cost scenarios, alternative tax or
financial arrangements, and revenue outcomes, so that African
authorities can negotiate fair, durable and competitive agreements.
In recognition of the growing number of
new natural resource projects in Africa, the IMF Institute, in
cooperation with the Bank of Algeria, organized a
High Level Seminar on Natural Resources that brought together
academics, civil society representatives, and veteran officials from
natural resource producers for a frank discussion of experience, good
and bad, of natural resource revenue management. The IMF Institute will
distill this into a book and has already launched a new course on the
Macroeconomics of Natural Resource Management for member country
With support from development partners,
the IMF will this year substantially step up its technical assistance in
tax policy and administration and in managing natural resource wealth by
launching two new trust funds.