IMF launched Regional Economic Outlook for Sub-Saharan Africa

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PHD Ruby E.M Randall , IMF Rep.
By Pa Modou Cham
International Monetary Funds (IMF) has yesterday launched the regional economic outlook for Sub-Saharan Africa (SSA). The launching was held at the Atlantic Hotel in Banjul.

On rebounding and rising downside risks, real GDP Growth in Sub-Saharan Africa rebounded to 2.7 percent in 2017 and is projected to increase to 3.1 and 3.5 percent in 2018 and 2019. Growth is highest among the non-resource intensive countries, which are expected to continue growing at rates in excess of 6 percent.

Growth in The Gambia has been more volatile than the regional average but is currently exceeding the average for SSA. In 2017 Growth in The Gambia was revised upwards from 3.5 percent to 4.6 percent in 2017, following the GDP rebasing, which broadened the scope of coverage to encompass other dynamic sectors and industries that were previously not captured in the national accounts.

Growth in The Gambia is forecasted to remain robust and exceed the regional average if the authorities stay on course with the current reform agenda, which aims to enhance fiscal sustainability (including by reducing fiscal risks emanating from state-owned enterprises), restore debt sustainability, and strengthen the business climate.

There is a need to enhance resilience and raise potential growth “in per capita terms” to shield the recovery and create enough jobs for those entering the region’s workforce, about 20 million new jobs per annum are needed to absorb new workers.

The debt-to-GDP ratio rose to an average of 57 percent at end-2017 in Sub-Saharan Africa. On average interest payments increased to 10 percent of revenues and grants by end-2017.

The current level of debt is concerning because of the high level of interest payments associated with it, and a growing number of SSA countries are either at a high-risk of debt distress or already in debt distress.
The Gambia remains a regional outlier with a debt to GDP ratio of 88 percent at end-2017, even after the rebasing of the GDP, which increased nominal GDP by 47 percent and its debt service ratios are about four times higher than the regional average. This is largely a legacy problem, and The Gambia is expected to restore debt sustainability within the context of implementation of its ongoing reform agenda, which aims to strengthen fiscal sustainability. But, adherence to the reform agenda will be critical.

Enhancing resilience and raising growth potential is essential; policies vary across countries, and include Improving policy frameworks; Promoting diversification;  Deepening trade and financial integration; Promoting flexible education systems to avoid skills mismatches, and digital connectivity and Creating an enabling environment for private investment

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