Last week the International Monetary Fund (IMF) published its World Economic Outlook for April 2011, and its prognosis continued to be positive for Sub-Saharan Africa, with the region only second to developing Asia in its rate of expansion as growth has returned to pre-crisis levels.
It notes that output gaps in many of the region’s economies are starting to close, although economic behemoth South Africa remains an exception.
Real activity in Sub-Saharan Africa is projected to expand by 5.5% in 2011 and 6% in 2012.
Recovery has been helped by strong domestic demand, stable financial flows, and terms-of-trade gains from strong commodity prices, which have also improved the region’s external balance.
Growth is being led by low-income countries, which are forecast to grow by 6% this year, with Ghana (the third-largest low-income country) seeing its forecast revised upwards to 13.75%. This makes it by far the fastest growing country in Sub-Saharan Africa in 2011.
Only one country, conflict ridden Côte d’Ivoire, is now expected to see gross domestic product (GDP) declining, with a -7.5% forecast.
While risks to the forecasts remain – the IMF cites any slowdown in Europe, a sharper than expected pick up in fuel and food prices as well as political risk with the large number of elections scheduled for 2011 – all in all Sub-Saharan Africa should continue moving forward economically.
Article written by the Imara Africa Securities team. Imara is an investment banking and asset management group renowned for its knowledge of African markets.