Macroeconomic Performances in Africa

In 2008 GDP growth in Africa was 5.7 percent; it was 6.1 percent in 2007. This was, thus, the fifth consecutive year when growth exceeded 5.5 percent. However, the impact of the global economic crisis is expected to slash growth rates to 2.8 percent in 2009, less than half of the average growth rate achieved during the past five years. The IMF56 found that over the last 30 years a 1 percent slowdown in the rest of the world has led to a fall of 0.5 percent in Sub-Saharan Africa, therefore any further worsening of international economic conditions could well reduce the growth prospects for Africa in 2009 and 2010 even further. The steady process of integration of the continent into the global economy that occurred during the last 15 years, has increased the vulnerability of Africa to drastic falls in financial flows, such as foreign direct investment, trade credit, and remittances and to reductions in export earnings. A greater-than-expected fall in these flows will certainly have negative consequences for African growth. On the other hand, the impact of these negative effects could – at least partially – be offset by the prudent macroeconomic management (See Box 7) of most African countries during the last decade, as well as increased trade links with China, India and other emerging economies. Moreover, more than 60 percent of the population live in rural areas, are dependent on domestic food production, and are thus somewhat less vulnerable to external shocks.