Sub-Saharan Africa: the Long Road up Mount Progress
Sub-Saharan Africa is facing headwinds from lower commodity prices, China’s slower growth, and normalization of monetary policy in the US. This has made the region’s economic outlook challenging, though not imminently gloomy. Sub-Saharan Africa is still one of the fastest growing economies in the world and we expect this to remain the case in the coming few years. But the region still faces some big challenges in moving up mount progress. Economic growth, for example, has not translated into much higher income per capita nor has it reduced poverty levels. This is especially worrisome given Africa’s rapidly growing population.
On a positive note, political stability in Sub-Saharan Africa has improved, although this stability remains fragile and there is a high risk of relapse. To break free from this vicious circle, Sub Saharan Africa needs to work on the quality of its still fragile institutional framework.
The quality of institutions is also strongly linked to the quality of the enabling environment for developing food and agriculture value chains. Adding more value throughout the value chain is needed to reverse the trend of growing agricultural trade deficits and to deliver on Sub-Saharan Africa’s large food and agricultural potential. All in all, Sub-Saharan Africa still faces a long climb up to reach long-term economic growth and prosperity.
Sub-Saharan Africa: struggling, but still growing
Sub-Saharan Africa is facing headwinds from lower commodity prices, a slower growing China and possibly rising US interest rates. This has made the economic outlook gloomier but we still expect the region to grow about 4% in the near future.
Sub-Saharan Africa: politically more stable, but still fragile
Sub-Saharan Africa has made significant progress on political stability in the past two decades. Nevertheless stability remains fragile and there are regional differences. Besides, institutional quality in Sub-Saharan Africa remains weak.
Sub-Saharan Africa: importance of institutions for developing food and agriculture value chains
To reverse the growing food and agriculture trade deficit and deliver on its potential, Sub-Saharan Africa must develop food and agriculture value chains. The enabling environment for doing this differs widely and is strongly linked to countries’ broader institutional development.