Africa's Macroeconomic Story

Africa's Macroeconomic Story

Much of Sub-Saharan Africa's post-independence macroeconomic history has been characterized by boom-bust cycles. Growth accelerations have been common, but short lived. Weak policy formulation and implementation led to large external and fisca...

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Bibliographic Details
Main Authors:	Hostland, Douglas, Giugale, Marcelo M.
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACTIVE DEBT ARREARS BALANCE OF PAYMENTS BANK RATE BASIS POINT BASIS POINTS BENCHMARK BOND BENCHMARK BONDS BENCHMARK YIELD BENCHMARK YIELD CURVE BENCHMARK YIELDS BOND YIELDS BOOM-BUST CYCLES BORROWING STRATEGIES BROAD MONEY BUDGET SURPLUSES BUSINESS CYCLE CAPACITY CONSTRAINTS CAPITAL ACCOUNT CENTRAL BANK COLLATERAL COMMERCIAL BANKS COMMODITY PRICES COMPETITIVE EXCHANGE RATES COMPETITIVENESS CONTINGENT LIABILITIES CONTINGENT LIABILITY COUPON CREDIBILITY CREDITOR CREDITORS CURRENCY CURRENCY CRISES CURRENCY CRISIS CURRENCY RISK CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS DEBT DEBT ACCUMULATION DEBT BURDEN DEBT BURDENS DEBT ISSUANCE DEBT LEVELS DEBT MANAGEMENT DEBT MATURITIES DEBT OBLIGATIONS DEBT OUTSTANDING DEBT POLICY DEBT REDUCTION DEBT RELIEF DEBT SERVICE DEBT SUSTAINABILITY DEFAULT RISK DEPRECIATIONS DEVALUATION DEVELOPING COUNTRIES DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC DEBT DOMESTIC DEBT INSTRUMENTS DOMESTIC DEBT MARKETS DOMESTIC MARKET DOMESTIC MARKETS DUTCH DISEASE ECONOMIC DEVELOPMENT ECONOMIC LIBERALIZATION EMERGING MARKET EMERGING MARKET ECONOMIES EQUITY INVESTMENTS EUROBOND EXCHANGE RATE EXCHANGE RATE APPRECIATIONS EXCHANGE RATE FLUCTUATIONS EXCHANGE RATE OVERVALUATION EXCHANGE RATE REGIMES EXCHANGE RATES EXPENDITURES EXPORT DIVERSIFICATION EXPORT REVENUES EXPORTERS EXPOSURE EXTERNAL DEBT EXTERNAL DEMAND EXTERNAL FUNDING EXTERNAL SHOCKS FEDERAL RESERVE FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL MANAGEMENT FINANCIAL STABILITY FISCAL BALANCES FISCAL DEFICITS FISCAL IMBALANCES FISCAL POLICY FISCAL POSITIONS FIXED EXCHANGE RATE FLEXIBLE EXCHANGE RATE FLEXIBLE REGIMES FLOATING INTEREST RATE FOOD PRICES FOREIGN CURRENCY FOREIGN CURRENCY EXPOSURES FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT GLOBAL CAPITAL GLOBAL CAPITAL MARKET GLOBAL CAPITAL MARKETS GOVERNANCE ISSUES GOVERNMENT DEBT GROWTH PERFORMANCE GROWTH RATE GROWTH RATES HIGH INFLATION HOLDING HUMAN DEVELOPMENT INCOME LEVELS INDEBTEDNESS INFLATION INFLATION RATE INFLATION RATES INFLATIONARY PRESSURES INFRASTRUCTURE INVESTMENT INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INTEREST RATES INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL DEBT INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL TRADE INVESTMENT FINANCES INVESTMENT PROJECTS INVESTMENT RATES INVESTOR BASE INVESTOR CONFIDENCE INVESTOR INTEREST LIABILITY MANAGEMENT LONG-TERM DEBT LOW-INCOME COUNTRIES MACROECONOMIC ENVIRONMENT MACROECONOMIC INSTABILITY MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILITY MACROECONOMIC STABILIZATION MACROECONOMIC VARIABLES MACROECONOMIC VOLATILITY MARKET DEVELOPMENT MARKET ECONOMY MATURITIES MONETARY AUTHORITIES MONETARY AUTHORITY MONETARY FUND MONETARY POLICY MONETARY STABILITY MONETARY UNION NATURAL RESOURCE OIL EXPORTERS OIL EXPORTING COUNTRIES OIL EXPORTING COUNTRY OIL PRICE OIL PRICES OIL RESOURCE OIL RESOURCES OIL REVENUE OIL REVENUES OVERVALUATION PENSION PENSION FUNDS POLICY RESPONSE POLICY RESPONSES POLITICAL STABILITY PORTFOLIO PORTFOLIO INVESTMENT POVERTY REDUCTION PRICE STABILITY PRIVATE BORROWING PRIVATE INVESTMENT PRIVATE PLACEMENT PROPERTY RIGHTS PUBLIC BORROWING PUBLIC DEBT PUBLIC INVESTMENT PUBLIC INVESTMENTS PUBLIC SECTOR BORROWING RAPID GROWTH REAL EXCHANGE RATE REAL EXCHANGE RATE APPRECIATION RESERVE RESERVE BANK RESERVES RETURNS RISK SHARING RISKY ASSETS RULE OF LAW SOVEREIGN BONDS SOVEREIGN DEBT SOVEREIGN RISK STRUCTURAL REFORMS TAX TAX TREATMENT TRADE BALANCE TRADE OPENNESS TRADE SHOCKS TRANSPARENCY TREASURIES TREASURY TREASURY BILLS TREASURY YIELD WEIGHTS
Online Access:	http://documents.worldbank.org/curated/en/2013/10/18343628/africas-macroeconomic-story http://hdl.handle.net/10986/16852

Description
Summary:	Much of Sub-Saharan Africa's post-independence macroeconomic history has been characterized by boom-bust cycles. Growth accelerations have been common, but short lived. Weak policy formulation and implementation led to large external and fiscal imbalances, excessive debt accumulation, volatile inflation, and sharp exchange rate fluctuations. This characterization changed, however, in the mid-1990s, when debt relief and better macroeconomic policy began to provide a source of stability that has helped sustain robust growth throughout much of the region. In resource rich countries, the process was supported over the past few years by a dramatic increase in commodity prices. But resources are only one part of the story. Growth has exhibited impressive resilience even in the face of negative external shocks, as in 2008-2009. While the short-term outlook remains positive, over the medium term policy makers face new challenges. Several countries have the potential to greatly expand natural resource production and become major commodity exporters; volatile resource revenue will complicate their fiscal and monetary planning. Rising investor appetite for financial assets of frontier markets and the development of domestic debt markets will continue to broaden the menu of and trade-offs among financing options at a time when global interest rates may start sloping upward. Complex financing arrangements -- notably for private-public or public-public partnerships in infrastructure -- will become more common and will generate new types of fiscal commitments and contingencies.

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