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Regional Economy

Regional Economy Paper
GDP growth in Sub-Saharan Africa is projected to rise to about 6½ percent in 2007, driven mainly by rising oil production in a number of countries. Even in oil-importing countries, growth should remain steady at about 5 percent. Inflation for the region is projected to remain unchanged at about 7 percent; three-quarters of the countries are expected to record single-digit inflation. These are among the key findings of the April 2007 IMF Regional Economic Outlook for Sub-Saharan Africa.
For the third consecutive year, economic growth in Sub-Saharan Africa remained strong at 5.4 percent in 2006 slightly lower than the 6 percent recorded in 2005. Because of constraints faced in expanding oil production, growth in oil exporting countries declined to 5.6 percent in 2006 from 7.9 percent in 2005. By comparison, growth in oil-importing countries at 5.3 percent was almost unchanged from 2005: nearly half of them recorded growth of 5 percent or more, supported by strong demand for -commodity exports, a good agricultural season, and rising investment.
The higher growth trend in Sub-Saharan Africa is attributable both to positive external developments, such as foreign demand and high commodity prices, and strong domestic investment and productivity gains. Sound economic policies in most countries have also played an important role in supporting these outcomes. Still, much more needs to be done to achieve the Millennium Development Goals (MDGs). While increased aid flows is necessary for greater progress in meeting the MDGs, the scaling up of aid promised at the Gleneagles summit has not yet materialized.
There have been other positive developments. First, oil-producing countries in Sub-Saharan Africa have benefited from large windfall profits in recent years and, in contrast to previous

commodity price booms, they have saved a significant part of their additional revenue. The challenge for public policy and policymakers...