restarting sub -saharan africa’s growth...

International Monetary Fund, Regional Economic Outlook for Sub-Saharan Africa, May 2017

Restarting Sub-Saharan Africa’s Growth Engine

Regional Economic Outlook

Montfort Mlachila Senior Resident Representative, South Africa

International Monetary Fund September 2017

Presenter

Presentation Notes

Some related literature finds that the higher average growth in advanced and emerging economies compared to developing countries is explained by their relatively lower volatility of growth, with most developing countries alternating between episodes of very fast growth and episodes of stagnation or decline (Pritchett (2000)). Several papers have then sought to characterize growth patterns as accelerations, plateaus and hard-landings, and explain these patterns using proxies of the macroeconomic, institutional and geographical environment

International Monetary Fund, Regional Economic Outlook for Sub-Saharan Africa, May 2017 2

After 15 years of strong growth, average activity decelerated in sub-Saharan African (SSA)

Significant differences across the region

Key policy questions

For the hardest-hit countries, how to revive growth?

For countries still growing fast, how to sustain growth?

Literature investigating frequency and duration of growth episodes:

Hausmann, Pritchett, and Rodrik (2005); Jones and Olken (2008); Berg, Ostry, and Zettelmeyer (2012); Tsangarides (2012).

Chapter examines in the context of sub-Saharan Africa.

Presenter

Presentation Notes

Some related literature finds that the higher average growth in advanced and emerging economies compared to developing countries is explained by their relatively lower volatility of growth, with most developing countries alternating between episodes of very fast growth and episodes of stagnation or decline (Pritchett (2000)). Several papers have then sought to characterize growth patterns as accelerations, plateaus and hard-landings, and explain these patterns using proxies of the macroeconomic, institutional and geographical environment


Experience with growth turning points and sustained growth episodes in SSA

How do external and domestic factors or policies behave around turning points?

What extends the duration of sustained growth episodes?

Policy implications


The setup

4

• Breaks – Variant of Bai and Perron (1998) procedure to test for structural breaks. – Minimum possible number of years between breaks and statistical

significance of those structural breaks. – 184 up-breaks and 185-down breaks in 146 countries over 1950-2016.

• Growth spells – Using the identified breaks and following Berg et al. (2012). – Complete growth spells: (i) start with up-break followed by a period of at

least 2 percent average p.c. income growth; and (ii) end with a down-break followed by a period of less than 2 percent average p.c. income growth.

– Incomplete growth spells: condition (i); and end at the end of the sample. – 80 complete and 67 incomplete spells in the full sample.

4

Trends & Evolution

Presenter

Presentation Notes

We begin by identifying structural breaks in the growth of per capita GDP (growth turning points).1 We follow Antoshin, Berg, and Souto (2008), who develop a variant of the Bai and Perron (1998) procedure to test for multiple structural breaks in time series when both the total number and the location of breaks are unknown.2 The procedure requires setting in advance two parameters for the determination of structural breaks: the minimum possible number of years between potential breaks (h) and the statistical significance to test for the existence of structural breaks (p). We focus on a minimum number of years between breaks of five years (h = 5), and a critical value of ten percent (p = 0.10), which maximize the number of accurately measured breaks for a reasonable minimum number of years between breaks.3 Next, we classify breaks as up-breaks—periods of higher growth than before the structural break, or growth accelerations—and down-breaks—periods of lower growth than before the structural break, or growth decelerations. We identify 184 up-breaks and 185 down-breaks in GDP per capita growth in 146 countries over the period 1950–2016. By construction, since we impose a minimum of five years between breaks, the method cannot identify a break in the first and last five years of the sample. Thus, for a country with 66 years of data and with sample h = 5, a maximum of 11 possible structural breaks can be identified, with the last possible break occurring in 2011


Many growth breaks in SSA and fewer down-breaks post 2000…

5

Selected Groups: Growth Up-Breaks 1950–2016

SSA DEV LAC DEV MENA DEV Asia Emerging Advanced

Selected Groups: Growth Down-Breaks 1950–2016

5

12

19

11

5

11

13

5

6

6

13

5

2

9

5

7

4

3

9

10

8

6

8

2

0 10 20 30 40 50 60 70 80

1950–69

1970–84

1985–99

2000–16

Number of up–breaks

40

30

47

67

5

20

14

8

4

15

7

9

3

11

5

10

7

1

6

3

11

7

5

3

16

6

9

0 10 20 30 40 50 60 70 80

1950–69

1970–84

1985–99

2000–16

Number of dow n–breaks

47

18

80

40

Presenter

Presentation Notes

We find that growth turning points are common in sub-Saharan Africa, but with substantial variation across time. While both up-breaks and down-breaks were frequent in the region before 2000, the region has experienced relatively fewer down-breaks since 2000. Growth spells are also frequent in sub-Saharan Africa—both among resource-intensive and nonrecourse-intensive countries—and have become more frequent over the last 15 years. But what differentiates sub-Saharan Africa from the rest of the world is that growth spells have tended to be shorter, start from worse growth positions, and more often end in “hard landings” compared to spells elsewhere––a result that still holds after controlling for armed and political conflicts.


…but also more dramatic shifts in growth.

6

Selected Groups: Change in Median Annual Per Capita Growth During Up-Breaks and Down-Breaks (Percentage points)

–15

–10

–5

0

5

10

15

SSA

DEV

MEN

A

Emer

ging

DEV

Asia

DEV

LAC

Adva

nced

Med

ian ch

ange

in ra

te of

grow

th Up–breaksDow n–breaks


Growth spells are frequent in the region and more concentrated after 1995…

7

Sub-Saharan Africa: Growth Spells 1960–94

Sub-Saharan Africa: Growth Spells 1995–2016

No spellsOil ex portersOther resource-intensiv e countriesNonresource-intensiv e countries


…but spells in SSA are shorter than elsewhere and often end in “rough landings”.

8

Selected Groups: Median Annual Per Capita Growth Before, During, and After Completed Spells (Percentage points)

–6

–4

–2

0

2

4

6

8

10

SSA

DEV

MEN

A

DEV

LAC

DEV

Asia

Emer

ging

Adva

nced

Med

ian gr

owth

rate

1. Before

–6

–4

–2

0

2

4

6

8

10

SSA

DEV

MEN

A

DEV

LAC

DEV

Asia

Emer

ging

Adva

nced

2. During

–6

–4

–2

0

2

4

6

8

10

SSA

DEV

MEN

A

DEV

LAC

DEV

Asia

Emer

ging

Adva

nced

3. After




What extends the duration of sustained growth episodes?

Policy implications


Coincident changes during turning points

10

• Examine what happens in an economy that experiences transitions between periods of strong and weak growth.

• Relate incidence of growth up-breaks and down-breaks to changes in external and domestic factors and policies.

• Methodology – Statistical tests on the changes observed in the mean values of each of the

variables of interest at the time of structural breaks in growth.

– No causal relationships between changes and the incidence of the breaks.

– Not controlling for other factors that may influence the break incidence.

10

Breaks


Growth turning points coincide with significant changes in key exogenous factors…

11

Sub-Saharan Africa: Change in External Shocks Variables Associated with Growth Breaks (Percentage points)

¹ Changes divided by 5. Note: *, **, and *** indicate that the changes in means are significant at the 10, 5 and 1 percent levels.

**

***

*

–4.0 –2.0 0.0 2.0

Terms of trade,change

U.S. federalfunds rate

Oil price,change¹

Change in up–breaks Change in dow n–breaks


… but also in the macroeconomic environment.

12

Sub-Saharan Africa: Change in Macroeconomic Variables Associated with Growth Breaks (percentage points)

¹ Changes divided by 10. 2 Changes divided by 5. Note: *, **, and *** indicate that the changes in means are significant at the 10, 5 and 1 percent levels.

***

***

**

***

**

***

***

*

–2.5 0.0 2.5 5.0

Inflation

Investment to GDP, ratio

Trade to GDP²

Foreign direct investment to GDP

Government revenue to GDP

Overall fiscal balance to GDP²

External debt to GDP¹

Aid to GDP²

Exchange rate regime (de facto)

Change in up–breaks Change in dow n–breaks


Turning points are also associated with changes in institutional, social, and structural indicators.

13

Growth up-breaks in the region coincide with improvements in the institutional environment and fewer conflicts

Improvements in structural factors are also associated with growth up-breaks

Total factor productivity, diversification, technology adoption

Market distortions associated with down-breaks




What influences the duration of sustained growth episodes?

Policy implications


Tighter global financial conditions and, to some extent, deteriorating terms of trade reduce the length of the growth spell.

15

External Shocks

EMEDEV = all emerging and developing economies; EMEDEVxSSA = all emerging and developing economies excluding sub-Saharan Africa

Incr

ease

d ris

k th

at th

e sp

ell w

ill e

nd

*

** **

0.00

0.04

0.08

0.12

US interest rates

Chan

ge in

prob

abilit

y, in

units

1. Interest Rate

***

*** ***

–0.015

–0.010

–0.005

0.000

0.005

0.010

Oil price, percent change Terms of trade, percentchange

Chan

ge in

prob

abilit

y, in

units

2. Oil Price and Terms of Trade

SSA World EMEDEV EMEDEVxSSA


But sound macroeconomic policies prolong spells…

16

Macroeconomic Indicators

Incr

ease

d ris

k th

at th

e sp

ell w

ill e

nd

***

*

***

*

**

*

–0.09

–0.06

–0.03

0.00

Government revenue toGDP, change

Investment to GDP,change

Chan

ge in

prob

abilit

y, in

units

2. Government Revenue, and Total Investment

***

*

–0.01

0.00

0.01

0.02

0.03

0.04

Overall fiscal balance toGDP, initial

Total public debt to GDP

Chan

ge in

prob

abilit

y, in

units

1. Overall Fiscal Balance, and Public Debt

SSA EMEDEV World EMEDEVxSSA


…as do good institutions and a peaceful environment.

17

Institutions and Conflict

Incr

ease

d ris

k th

at th

e sp

ell w

ill e

nd

SSA EMEDEV World EMEDEVxSSA

***

***

*

**

*** **

** **

*** **

**

**

**

–0.40–0.35–0.30–0.25–0.20–0.15–0.10–0.05

0.00

Politicalstability

(Polity 2)

Politicalstability(Polity 2,

cumulativechange)

Moreconstraints

on theExecutive (initial)

Investmentprofile

Chan

ge in

prob

abilit

y, in

units

***

***

–1.00

–0.75

–0.50

–0.25

0.00

0.25

0.50

Fewer internal conflict(cumulative change)

Fewer civil wars

Chan

ge in

prob

abilit

y, in

units

2. Internal Conflict and Civil War1. Institutions, Executive Constraints, Investment Profile


Putting it all together: improved policies, better institutions, fewer market distortions, and a better external environment support growth spells.

18

Sub-Saharan Africa: Impact on Spell Duration (Years)

Note: Each bar shows the change in the expected duration of a growth spell (in numbers of years) if a variable improves by 25 percentile points from the median value in the sample of sub-Saharan African countries, while holding other variables constant.

012345678

Tradeopenness

Inflation Investmentto GDP

Total publicdebt

Oil price,change

Terms oftrade

growth

Polity 2,cumulative

change

Real GDPper capita

growth

Relative priceof

investment toconsumption

Macroeconomic Variables External Shocks Institutions Other

Impa

ct of

an im

prov

emen

t of 2

5 pe

rcen

tile po

ints s

tartin

g fro

m

the m

edian




What influences the duration of sustained growth episodes?

Policy implications


Summary of Results

20

• Growth spells in sub-Saharan Africa are sustained by improved monetary and fiscal policies, better political institutions, less market distortions, and better external environment. – Increases in the investment rate, more trade openness, lower inflation, more exchange

rate flexibility, and lower debt to GDP ratio tend to prolong spells in the region.

– Higher growth rate in the previous period increases the probability that a spell comes to an end—pointing to the risks associated with an overheated economy.

• Confirm the “Africa-rising” narrative: accommodative global conditions, high commodity prices, and improvements in policies implemented have sustained spells so far.

• Additional benefits from improvements in the political environment and reducing distortions associated with high relative price of investment.

20

Spells: summary view

Presenter

Presentation Notes

Growth up-breaks and periods of sustained growth have become more common among countries in sub-Saharan Africa since the turn of the century. However, historically, spells in the region tend, on average, to last for shorter periods than elsewhere, exhibit larger swings, and often end in “hard landings.” Thus, the critical challenge in the context of the current economic difficulties faced by many countries in the region is to sustain spells for longer and avoid hard landings. Historically, engineering growth up-breaks and transforming them into sustained periods of growth has been possible because of several factors and policies rather than one or two driving sources. For example, a supportive external environment such as favorable terms of trade or global financial conditions and improvements in the quality of institutions haveclearly helped. However, our analysis shows that domestic macroeconomic policies play a critical role. These include monetary policy geared toward low inflation, sound fiscal policy to prevent excessive public debt accumulation, outward-oriented trade policies to make the best of opportunities offered by a globalized world, and macro-structural policies to reduce market distortions at the domestic level, to boost investment.


Conclusions and Policy Considerations

21

Strong domestic policy response to revive growth

Macroeconomic and structural policies

Countries where growth has slowed focus on macroeconomic stability to set the stage for a growth turnaround that can be sustained

Countries enjoying a growth spell address emerging vulnerabilities and focus on prolonging growth

All countries complementing efforts to unlock growth potential

Presenter

Presentation Notes

For countries in a severe growth slowdown, the most pressing challenge is to preserve macroeconomic stability which can help trigger a turnaround and lead to a period of sustained growth. Such a turnaround can be achieved through a policy adjustment that include consistent monetary policy to contain inflation and sound fiscal policy to anchor public debt increases. Also, an environment that fosters investment, increased openness to trade, and more stable political environments can help growth recover. In countries still enjoying a growth spell, the focus should be on prolonging it and trying to avoid a hard landing. Attention should turn to addressing potential vulnerabilities, focus on rebuilding buffers––in particular, maintaining or expanding the fiscal space––and stem increases in public debt through domestic revenue mobilization to finance a larger part of their infrastructure projects, while avoiding overheating. Finally, for all countries, more efforts are needed to unlock their growth potential. These efforts include advancing economic diversification to increase resilience to shocks and generate new sources of growth; deepening technology adoption; invigorating financial reforms; and strengthening macro-structural policies to reduce market distortions and risks associated with investment, and to improve the business climate.


Thank You

The online edition of the

Regional Economic Outlook for sub-Saharan Africa

is now available at www.imf.org

Also check:

Arizala, et al. 2017. “Growth Breaks and Growth Spells

in Sub-Saharan Africa,” IMF Working Paper 17/202.

22

http://www.imf.org/

Additional material


Breaks procedure

24

• Berg et al. (2012) apply a variant of Bai-Perron (1998, 2003) to test for multiple structural breaks in time series when both the number and location are unknown. – Sample-specific critical values, heteroskedasticity and sample size (rather than asymptotic). – Details in Antoshin et al. (2008).

• Identify structural breaks in each country’s per capita growth (rgdpch, PPP Converted GDP Per Capita (chain series), at 2005 constant prices in Penn Tables 7.1).

Process • Minimum years between breaks h; total breaks b = int(T/h)-1; so for T = 50, b = 9. • Algorithm tests for the presence of up to b breaks in the growth series.

– Test null hypothesis of zero structural breaks against the alternative of 1 or more (up to b). – The location of potential breaks is decided by minimizing the sum of squared residuals between the

actual data and the average growth rate before and after the break(s).

– Critical values generated through Monte Carlo simulations.

24

For example, 305let == ,Th . Discard the first h periods. -Test for 1 break:

},...,,,{ 2514131211 ===== ttttt RSSRSSRSSRSSRSSMin -Test for 2 breaks:

},...,...,...,,,...,,{ 25,2025,1217,1225,1117,1116,11 ============ tttttttttttt RSSRSSRSSRSSRSSRSSMin -Test for 3 breaks, etc:

},...,,...,,...,{ 25,16,1122,16,1125,20,1121,16,11 ============ tttttttttttt RSSRSSRSSRSSMin

Presenter

Presentation Notes

We begin by identifying structural breaks in the growth of per capita GDP (growth turning points).1 We follow Antoshin, Berg, and Souto (2008), who develop a variant of the Bai and Perron (1998) procedure to test for multiple structural breaks in time series when both the total number and the location of breaks are unknown.2 The procedure requires setting in advance two parameters for the determination of structural breaks: the minimum possible number of years between potential breaks (h) and the statistical significance to test for the existence of structural breaks (p). We focus on a minimum number of years between breaks of five years (h = 5), and a critical value of ten percent (p = 0.10), which maximize the number of accurately measured breaks for a reasonable minimum number of years between breaks.3 Next, we classify breaks as up-breaks—periods of higher growth than before the structural break, or growth accelerations—and down-breaks—periods of lower growth than before the structural break, or growth decelerations. We identify 184 up-breaks and 185 down-breaks in GDP per capita growth in 146 countries over the period 1950–2016. By construction, since we impose a minimum of five years between breaks, the method cannot identify a break in the first and last five years of the sample. Thus, for a country with 66 years of data and with sample h = 5, a maximum of 11 possible structural breaks can be identified, with the last possible break occurring in 2011.


Growth breaks

25

25

RegionNo. of

countriesTotal

Average break size

50s-60s 1970-84 1985-99 2000-16 Total Average break size

50s-60s 1970-84 1985-99 2000-16

Total upbreaks 146 184 9 30 47 67 40 116 8 17 16 60 23Advanced 30 24 5 8 6 8 2 9 5 4 2 3 0Emerging 18 26 8 4 3 9 10 18 6 5 0 9 4Developing 98 134 10 18 38 50 28 89 9 8 14 48 19

Sub-Saharan Africa 42 47 13 5 12 19 11 36 12 2 5 18 11LAC 24 34 7 5 11 13 5 19 6 5 1 11 2Asia 13 23 8 2 9 5 7 15 6 0 6 5 4MENA 19 30 11 6 6 13 5 19 12 1 2 14 2

Total downbreaks 146 185 -9 18 80 40 47 120 -7 7 53 32 28Advanced 30 34 -5 3 16 6 9 27 -4 2 11 5 9Emerging 18 26 -8 3 11 7 5 15 -7 2 8 3 2Developing 98 125 -10 12 53 27 33 78 3 3 34 24 17

Sub-Saharan Africa 42 47 -11 5 20 14 8 34 -9 1 16 12 5LAC 24 35 -7 4 15 7 9 19 -6 1 10 4 4Asia 13 14 -12 0 7 1 6 7 -10 0 2 2 3MENA 19 29 -12 3 11 5 10 18 -12 1 6 6 5

Table 1. Growth Breaks by Decade and Country Group (h=5 and h=8) 1950-2016

h=5 h=8


Growth spells: frequency and duration

26

26

10 years 16 years 10 years 16 years

Advanced 30 13 17 77 31 6 15 100 17Emerging 18 9 11 33 11 5 13 80 20Developing 98 58 12 45 22 25 13 52 24

Sub-Saharan Africa 42 15 8 33 13 6 9 33 0LAC 24 18 11 44 22 8 13 63 25Asia 13 7 15 57 43 4 20 75 75MENA 19 18 13 50 22 7 11 43 14





Incomplete spells

Total

% of spells lasting at

Complete spells

Table 2. Frequency and Duration of Growth Spells (h=5 and h=8) 1950-2016

h=5 h=8No. of

countriesNo. of spells

Mean duration

% of spells lasting at No. of spells

Mean duration


Growth spells: before, during, after

27

27

before during afterbefore start

after end before during after

before start

after end

Advanced 1.2 5.4 -0.1 0.0 0.1 1.4 5.3 0.6 1.1 1.1Emerging -1.1 9.1 -1.9 -1.5 -0.8 -0.3 6.0 -1.4 -0.8 0.4Developing -2.8 8.5 -2.0 -3.1 -1.7 -1.6 7.8 -0.5 -0.5 0.1

Sub-Saharan Africa -5.6 9.6 -6.0 -4.6 -6.0 -3.9 8.7 -1.5 -2.3 -0.3LAC -1.2 6.7 -0.3 -2.5 0.0 -0.8 5.0 -0.1 -0.2 0.1Asia -0.1 9.1 -1.2 -2.8 -3.0 0.7 6.2 -0.6 1.0 -1.2MENA -3.0 9.2 -0.7 -2.4 0.6 -1.8 11.3 -0.3 -0.1 1.2

Advanced 0.2 4.4 -0.2 2.3 9.2 0.8Emerging -1.9 5.7 -1.7 -0.4 5.3 -0.7Developing -3.9 5.7 -5.3 -3.1 6.4 -5.4

Sub-Saharan Africa -4.8 5.8 -5.5 -4.6 7.0 -6.4LAC -1.8 4.8 -3.1 -0.5 4.9 -2.6Asia -1.5 6.5 -1.3 -0.7 6.3 -1.3MENA -8.3 5.7 -16.6 -4.0 6.3 -11.0

Complete spells

Incomplete spells

Table 3. Average Growth Before, During and After Contraction Spells (h=5 and h=8) 1950-2016h=5 h=8

Average growth 3 years … Average growth 3 years …


Group Country 1950

1951

1952

1953

1954

1955

1956

1957

1958

1959

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Angola 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Cameroon 2 1Chad 2 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Congo, Republic of 1 3 3 3 3 3 2 1 3 3 3 3 3 3 3 3 3 3 3 3 2Equatorial Guinea 2 1 3 3 3 3 3 3 3 2 3 3 3 3 3 3 3 3 2Gabon 2Nigeria 2 1 3 3 3 3 3 2 2 1 1 3 3 3 3 3 3 2 3 3 3 3 2South SudanBotswana 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 2 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Burkina Faso 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Central African RepublCongo, Democratic Rep 2 1 4 4 4 4 4 4 4Ghana 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Guinea 2 1 4 4 4 4 4 4 4 4 4 4 4Liberia 2 2 1 3 3 3 3 2 1 3 3 3 3 3 2 1 4 4 4 4 4 4 4 4 4Mali 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Namibia 1 4 4 4 4 4 4 4 4 4 4 4 4 4Niger 2 1 3 3 3 3 2 1Sierra Leone 2South AfricaTanzania 2 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Zambia 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Zimbabwe 2 1 3 3 3 3 3 2 1 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 2 1 4 4 4 4 4 4 4 4Benin 2 1 3 3 3 3 3 3 3 3 3 2Burundi 2 1 4 4 4 4 4 4 4 4 4Cabo Verde 1 3 3 3 3 3 2 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Comoros 2 2Côte d'Ivoire 2 1 4 4 4 4 4 4 4 4 4EritreaEthiopia 1 3 3 3 3 2 1 4 4 4 4 4 4 4 4 4 4 4 4 4Gambia, TheGuinea-Bissau 2 1Kenya 1 4 4 4 4 4 4 4 4 4 4 4 4Lesotho 2 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Madagascar 2 1 3 3 3 3 2 1 2 1 4 4 4 4 4 4 4Malawi 2 1Mauritius 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Mozambique 2 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Rwanda 2 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Senegal 1 3 3 3 3 2 1SeychellesSwaziland 2São Tomé and Príncipe 2 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4Togo 2Uganda 1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4

Up breaks Down breaks Completed Spells Incompleted Spells

Oil Exporters

Other resource-intensive countries

Non-resource-intensive countries

SSA breaks and spells heat map


Nigeria

29

29

67

89

1950 1960 1970 1980 1990 2000 2010 2020

NigeriaLn(expenditure side GDP per capita using PWT 9.0 extended) with h=5Breakyears: 1960 1968 1974 1985 1990 1998 2005 2010


Zimbabwe

30

30

77.

58

8.5

1950 1960 1970 1980 1990 2000 2010 2020

ZimbabweLn(expenditure side GDP per capita using PWT 9.0 extended) with h=5Breakyears: 1961 1968 1974 1979 1996 2008


Ethiopia

31

31

5.5

66.

57

7.5

1950 1960 1970 1980 1990 2000 2010 2020

EthiopiaLn(expenditure side GDP per capita using PWT 9.0 extended) with h=5Breakyears: 1979 1984 2003


Rwanda

32

32

66.

57

7.5

1950 1960 1970 1980 1990 2000 2010 2020

RwandaLn(expenditure side GDP per capita using PWT 9.0 extended) with h=5Breakyears: 1989 1994


Uganda

33

33

6.6

6.8

77.

27.

47.

6

1950 1960 1970 1980 1990 2000 2010 2020

UgandaLn(expenditure side GDP per capita using PWT 9.0 extended) with h=5Breakyears: 1993


Changes during growth turning points

34

34

Variables Sym Obs Sym Obs Sym Obs Sym

Fed Funds (Krippner) -2.4 *** -0.9 *** *** -2.4 *** 145 -0.8 *** *** -2.2 *** 98 -0.9 ** ** -2.9 *** 47 -0.8 ***Trading partners growth 0.4 *** -0.3 * 0.4 ** 90 -0.2 0.5 *** 63 -0.4 * 0.0 27 0.3CTOT, change 0.5 *** -0.3 *** 0.5 *** 142 -0.4 *** 0.6 *** 97 -0.3 ** 0.5 ** 45 -0.6 *

Political risk 6.1 *** 1.3 * *** 6.5 *** 57 1.1 *** 7.6 *** 39 0.7 *** 4.1 ** 18 2.1Internal conflict 1.3 *** 0.0 *** 1.4 *** 58 0.1 *** 1.3 *** 40 0.0 *** 1.5 *** 18 0.3 **Law order 0.4 *** 0.0 *** 0.4 *** 58 0.0 ** 0.4 *** 40 0.0 ** 0.4 ** 18 -0.1

Infant mortality rate -23.2 *** -18.3 *** ** -24.8 *** 137 -20.4 *** ** -23.7 *** 95 -18.9 *** * -27.3 *** 42 -23.6 ***Gini coefficient -1.5 *** 0.4 -1.5 *** 29 0.3 -1.1 * 22 0.2 -2.5 ** 7

Log (1+inflation) -0.3 *** 0.0 ** -0.3 *** 133 0.1 -0.2 ** 94 0.1 -0.4 *** 39 0.1Total inv. to GDP 3.4 *** -0.5 *** 3.6 *** 151 0.1 *** 3.2 *** 104 0.2 *** 4.4 *** 47 -0.2 *Private inv. to GDP 3.5 *** -1.3 3.6 *** 47 -0.8 3.8 *** 26 0.4 3.4 21 -2.4Gov. revenue to GDP 2.2 *** 0.8 2.2 *** 60 0.5 * 1.4 * 47 0.4 3.7 ** 13Gov. exp. to GDP -2.8 2.6 *** -3.1 58 2.4 *** -2.2 44 2.5 *** -4.7 14Fiscal balance to GDP 5.1 * -1.7 *** 5.3 * 57 -1.8 ** 3.7 44 -2.1 *** 8.4 13Trade to GDP 9.5 *** 6.5 *** 9.3 *** 151 3.2 ** *** 9.5 *** 104 2.9 * *** 9.0 ** 47 3.9FDI to GDP -1.5 *** -0.5 * ** -1.6 *** 119 -0.6 ** ** -1.4 *** 86 -0.8 ** -2.2 *** 33 -0.2 **Aid to GDP -0.6 0.8 -0.6 125 0.9 -0.8 87 -0.9 ** -0.1 38 5.0 *** **

RER overvaluation -1.9 5.0 *** -4.0 * 141 4.1 * -3.8 94 4.0 -4.2 47 4.4Large overvaluation -0.1 *** 0.0 ** -0.1 *** 151 0.0 *** -0.1 *** 104 0.0 * -0.1 47 -0.1 *

TFP, growth 3.1 *** -3.5 *** 3.6 *** 88 -3.9 *** 3.3 *** 69 -4.0 *** 4.8 *** 19 -3.4 ***Diversification index 0.044 *** -0.027 ** 0.046 *** 118 -0.036 ** 0.055 *** 80 -0.042 ** 0.025 38 0.0Mobile lines per 100 people 1.6 *** -1.6 *** 1.8 *** 116 -1.6 *** 2.4 *** 79 -2.1 *** 0.4 37 -0.9 **

Structural Transformation and Technology Adoption

Up breaks Down breaksWorld Emerging and Developing Emerging and Developing no SSA Sub-Saharan Africa

Up breaks Down breaks Up breaks Down breaks Up breaks Down breaksExternal Shocks

Institutions

Social and Human Development

Macro Economic Indicators

Exchange Rate Misalignments and Regimes

restarting sub -saharan africa’s growth...

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