This is a talk about the IMF structural adjustment program in Africa

1. DR. MARK ELLYNE
CHALLENGES IN AFRICA
JULY 2013
Does Africa Need the
Bretton Woods Institutions?

2. WHO ARE THE NEW RULERS OF THE
WORLD?
Africa and the IMF – Mark Ellyne
1/29/20152

3. CONSPIRACY OR COOPERATION?
1/29/2015Africa and the IMF – Mark Ellyne 3
International Conspiracy to
Impose Western Hegemony
on Africa/Developing World?
or
Western economic support
to Africa/low income countries
to raise their economic development?

4. SECRET PLAN FOR IMF WORLD DICTATORSHIP
IDENTIFIED BY THE ILLUMINATI (5/11/2005)
4
…a British-steered attempt to impose the
dictatorship of the International Monetary Fund
(IMF) on the entire planet, …
Under this plan, the IMF would dictate the
economic policies of all states. The IMF
orthodoxy is austerity, sacrifice, deregulation,
privatization, union busting, wage reductions,
free trade, a race to the bottom, and
prohibitions on advanced technologies. These
policies would strangle humanity.
Source: http://www.conspiracyarchive.com/Blog/ The Illuminati Conspiracy Archive
1/29/2015Africa and the IMF – Mark Ellyne

5. WHY IS AFRICA SO POOR?
Africa and the IMF – Mark Ellyne 5 1/29/2015

6. WHO ARE THE
BRETTON WOODS INSTITUTIONS?
Africa and the IMF – Mark Ellyne 6
World
Trade
Organ.
 Develop
global rules of
trade
 Provide
mechanisms to
resolve trade
disputes
World Bank
Promote
economic
development
World Bank
motto: “Our
dream is a
world free of
poverty”
IMF
Promote
global
financial
stability
Promote
macro-
economic
stability
1/29/2015

7. PURPOSE OF THE IMF
Africa and the IMF – Mark Ellyne 7
• Prevent another great depression
• Promote exchange rate stability and
convertibility
o Facilitate growth and trade
• Lender of last resort for balance of
payments problems
o Policy based lending
1/29/2015

8. WORLD BANK VS. IMF
Africa and the IMF – Mark Ellyne 8
World Bank
• Development projects
• Raises money on
international markets
• Mission is to reduce
poverty
IMF
• Policy-based lending
• Use members’
contributions
• Mission is to maintain
financial and economic
stability
1/29/2015

9. IMF INTERVENTION MODEL
Africa and the IMF – Mark Ellyne 9
1. Economic problem/shock affects
country’s balance of payments, i.e.
ability to pay for imports
2. Government invites IMF assistance
3. IMF proposes loan and demands
conditionality
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10. WORLD BANK INTERVENTION MODEL
Africa and the IMF – Mark Ellyne 10
1. Economic development affects
country’s income and poverty
2. Government asks for loans and
technical assistance for large-scale
investment projects
3. WB finances development projects to
reduce poverty and raise income
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11. POVERTY IS LINKED TO GROWTH
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Why hasn’t Africa improved as much as Asia?
Poverty Headcount (%)
1993 1999 2002 2005 2008 2010
SSA 59.4 58.0 55.7 52.3 49.2 48.5
South Asia 51.7 45.1 45.1 39.4 36.0 31.0
Latin America 11.4 11.9 11.9 8.7 6.5 5.5
Source: Povacal, World Bank

12. THE DOWNTURN IN GROWTH BEGINNING IN 1980 LED
AFRICA TO SEEK ADVICE FROM THE IMF.
1/29/2015Africa and the IMF – Mark Ellyne 12
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
African GDP per Capita in US$
1960s 1970s 1980s

13. ECONOMIC GROWTH THEORY
Africa and the IMF – Mark Ellyne 13
Y = TFP KαL (1-α)
Growth depends on:
Capital accumulation
Labour force growth,
Education and skills,
Technological progress
1/29/2015

14. AFRICA’S GROWTH IS LOWER
THAN THEORY PREDICTS
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• Sub-Saharan African countries (48) have
statistically grown slower than other
regions, even after taking account of
standard economic variables.

15. UNTIL THE MID-1990S, GROWTH IN SSA WAS DRIVEN PRIMARILY BY
FACTOR ACCUMULATION IN ALL COUNTRY GROUPS.
1985-89 1990-94 1995-99 2000-06
Sub-Saharan Africa
Real GDP growth 3.5 1.7 4.4 4.2
Factor accumulation 3.2 3.0 3.3 3.0
TFP growth 0.3 -1.3 1.1 1.2
High-growth countries
Real GDP growth 5.1 2.7 7.3 5.1
Factor accumulation 4.0 3.9 4.8 3.3
TFP growth 1.1 -1.2 2.5 1.8
Low-growth countries
Real GDP growth 3.7 2.8 2.3 1.1
Factor accumulation 2.5 2.9 2.7 2.2
TFP growth 1.2 -0.1 -0.4 -1.1
HIPC post-completion point countries
Real GDP growth 2.6 0.6 4.3 5.2
Factor accumulation 3.2 2.9 3.1 3.4
TFP growth -0.6 -2.3 1.2 1.8
Fragile countries 1
Real GDP growth 2.3 1.7 1.7 0.8
Factor accumulation 2.4 2.2 2.0 1.6
TFP growth -0.1 -0.5 -0.3 -0.8
Source: IMF, World Economic Outlook and staff calculations.
1
Excluding HIPC post-completion point countries (The Gambia,
Sao Tome and Principe, and Sierra Leone).
Sources of Growth in Sub-Saharan Africa: 1985-2006

16. WHAT MAKES AFRICA DIFFERENT?
Why is TFP growth lower than elsewhere?
• Geography?
• Demographics?
• Culture?
• Resource endowment?
• Politics: Internal & External?
• Institutions
• Governance?
• Policies?
1/29/2015Africa and the IMF – Mark Ellyne 16

17. WHY DOES AFRICA GROW SLOWER?
Geography
(Bloom and Sachs)
• Geography and Climate: African soils,
topography, and disease ecology raise
obstacles to growth, including low
agricultural productivity and high disease
burdens.
“Geography, Demography, and Economic Growth in
Africa” (Bloom and Sachs 1998)
Mark Ellyne - Do We Need the
IMF
17

18. WHY DOES AFRICA GROW SLOWER?
Geology
• Resource Curse
• Heavy dependence on a small number of
primary exports, which have shown long-
term price declines (terms of trade
declines) and high volatility;
Lifting the Oil Curse: Improving Petroleum Revenue
Management in Sub-Saharan Africa (IMF 2004)
18

19. THE PROBLEM IS “THE RESOURCE CURSE”
• The exploitation of Africa’s prolific natural
resources encourages rent seeking
(payments for nonproductive work), and
ultimately the Dutch Disease (a high value-
added export appreciates the exchange
rate and may make traditional exports
noncompetitive).
Mark Ellyne - Do We Need the
IMF
19

20. WHY DOES AFRICA GROW SLOWER?
Politics
External politics
• The legacy of the slave trade;
• Colonial rule;
• Cold War manipulations of African
politics; and
• Foreign aid
Mark Ellyne - Do We Need the
IMF
20

21. THE IMF EXPLANATION
Africa and the IMF – Mark Ellyne 21
Poor economic policies
• Excessive protectionism--inefficient;
• Excessive government regulation--slows
business and creates rents;
• Excessive fiscal spending;
• Tendency for governments to print
money, which causes inflation;
• High economic rents (corruption), and
• Lack of domestic capital.
1/29/2015

22. TO ALLEVIATE CAPITAL SHORTAGE,
DONORS GAVE LOANS DURING THE 1980S
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0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
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
ExternalDebt/GDP (%)
Asia
SSA
Forecast

23. BAD GOVERNMENT POLICIES ARE
OFTEN THE SOURCE OF THE PROBLEM
1/29/2015Africa and the IMF – Mark Ellyne 23

24. THE BWI SOLUTION TO
AFRICA’S DEFICIENT POLICIES
1/29/2015Africa and the IMF – Mark Ellyne 24
Structural Adjustment Programs (SAPs),
created in the 1980s, promoted the
traditional economic wisdom of the time,
which became embodied in what was
called the Washington Consensus (1999),
which was at the center of adjustment
policies. (“Neoliberal policies”)

25. WASHINGTON CONSENSUS
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Fiscal Policy
1. Fiscal discipline is good;
2. Public expenditure priorities should be
social infrastructure and public goods;
3. Tax reform should broaden the tax base.

26. IMPLIED POLICY PRESCRIPTIONS
26
 Reduce the fiscal deficit
• To take pressure off interest rates, stop
crowding out the private sector, and reduce
the current account deficit
 Raise taxes or cut expenditure
Painful
1/29/2015Africa and the IMF – Mark Ellyne

27. WASHINGTON CONSENSUS
27
Price Liberalization
4. Deregulation to encourage market-
determined prices, which create more efficient
allocation. Eliminate price controls and
subsidies;
5. Maintain a single exchange rate determined
by the market.
1/29/2015Africa and the IMF – Mark Ellyne

28. IMPLIED POLICY PRESCRIPTIONS
28
Depreciate the exchange rate to increase
competitiveness
• To raise exports and reduce imports, (reduce
the trade deficit) and stimulate domestic
production
Raises inflation
Painful
1/29/2015Africa and the IMF – Mark Ellyne

29. WASHINGTON CONSENSUS
29
Free Trade
6. Trade liberalization is good for growth
and consumer welfare.
7. Encourage privatization and eliminate
barriers to foreign direct investment to
encourage more & efficient investment.
1/29/2015Africa and the IMF – Mark Ellyne

30. WASHINGTON CONSENSUS
30
8. Liberalize the financial sector to obtain
efficient allocation of capital, including
market interest rates, including free flow
of international capital.
9. Create secure property rights to
encourage investment.
10. Maintain macroeconomic stability.
1/29/2015Africa and the IMF – Mark Ellyne

31. IMPLIED POLICY PRESCRIPTIONS
31
Raise the real interest rate
• To reduce inflation, encourage savings, and
make efficient use of capital.
Hurts business and reduces jobs
Painful
1/29/2015Africa and the IMF – Mark Ellyne

32. RESULTS OF POLICIES IN AFRICA
1/29/2015Africa and the IMF – Mark Ellyne 32
Average GDP Growth Rates (in Percent)
1981-90 1991-2000
World 3.3 3.1
Advanced economies 3.2 2.8
Developing Asia 6.7 7.4
Sub-Saharan Africa 2.4 2.3
Source: World Bank and WEO

33. THE COUNTER ATTACK TO THE WC
STIGLITZ (2002)
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34. ATTACK ON THE
WASHINGTON CONSENSUS
1/29/2015Africa and the IMF – Mark Ellyne 34
We don’t live in textbook neoclassical
world - incomplete information and
imperfect markets.
Shock therapy is worse than the
gradualist approach—especially for
transition economies

35. ATTACK ON THE
WASHINGTON CONSENSUS
1/29/2015Africa and the IMF – Mark Ellyne 35
Need to build new institutions, like land
titles, commercial courts, and relevant
laws before implementing new policies.

36. ATTACK ON THE
WASHINGTON CONSENSUS
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Privatization is not always the answer
o State-owned enterprises may provide
socially beneficial services and
employment.

37. ATTACK ON THE
WASHINGTON CONSENSUS
1/29/2015Africa and the IMF – Mark Ellyne 38
• Trade liberalization need to done slowly
and may not always be good
o Should consumers pay more to facilitate
domestic employment?
o Protection may give an infant industry a
chance to succeed

38. ATTACK ON THE
WASHINGTON CONSENSUS
1/29/2015Africa and the IMF – Mark Ellyne 39
• Financial liberalization:
oCan be dangerous without appropriate
supervision
oFree flow of capital may be dangerous,
especially for small economies

39. TREVOR MANUEL: MARKET FAILURES
WERE THE PROBLEM (2003)
1/29/2015Africa and the IMF – Mark Ellyne 41
• World trade regime not favourable to
Africa. External shocks very damaging to
undiversified exporters.
• International financial system and aid
practices caused frequent disruptions to
developing country markets
• Grants were needed in place of loans

40. DOMESTIC MARKET FAILURES
42
• State-owned enterprises can be good
(Asia) but the African State was too weak
to manage them
• Shortage of social capital--needed more
human capital and physical infrastructure
• Africa’s rural economy is to dependent on
the more modern urban and fiscal sectors
1/29/2015Africa and the IMF – Mark Ellyne

41. DOES IMF CREATE AUSTERITY?
THE IMF RESPONSE
1/29/2015Africa and the IMF – Mark Ellyne 43
• “Saying the IMF causes austerity is like
saying doctors cause plagues because you
often find them around sick people.”
• “Emerging-market debtors typically come
to the IMF only when their finances are
under extreme duress ... and other
creditors have turned their backs.”
The IMF Strikes Back By Kenneth Rogoff , Economic Counselor and
Director of the Research Department International Monetary Fund

42. WHAT WAS WRONG WITH SAP ADVICE?
1/29/2015Africa and the IMF – Mark Ellyne 44
I. Fundamentally flawed?
II. Faulty implementation?
III. Reform program not wrong, but
incomplete?

43. NEW THINKING
1/29/2015Africa and the IMF – Mark Ellyne 45
• Joseph Stiglitz – How to make
Globalization Work
• Jeff Sachs – The End of Poverty
• Dembisa Moyo – Dead Aid
• Paul Collier – The Bottom Billion;
Wars, Guns and Votes
• Governance

44. SOLUTIONS TO THE PROBLEM
Africa and the IMF – Mark Ellyne 46 1/29/2015

45. THE END OF POVERTY:
ECONOMIC POSSIBILITIES FOR OUR TIME
1/29/2015Africa and the IMF – Mark Ellyne 47
Jeffrey Sachs (2005) argues that extreme
poverty—defined by the World Bank as
incomes of less than 1 dollar per day—can
be eliminated globally by the year 2025,
through carefully planned development
aid, that reaches the "bottom rung" of the
ladder.

46. SACHS: MORE AID
Africa and the IMF – Mark Ellyne 48
In order to achieve the goal of
eliminating global poverty,
development aid must be raised from
$65 billion globally as of 2002 to
between $135 and $195 billion a year
by 2015, including debt cancellation
for the world's poorest countries.
1/29/2015

47. DEAD AID BY DAMBISA MOYO
(2009)
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48. MOYO’S HYPOTHESES:
Africa and the IMF – Mark Ellyne 50
Foreign aid fosters dependence;
Foreign aid fosters corruption;
Foreign aid encourages bureaucracy;
Foreign aid reduces tax revenue;
Foreign aid reduces private investment;
Foreign aid creates bottlenecks;
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49. DONOR AID AND CORRUPTION
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Historically:
“Corrupt governments do not receive
less Foreign aid.”
“Countries that receive more aid, tend
to have higher levels of corruption.”
Source: Do Corrupt Governments Receive Less
Foreign Aid? (NBER Working Paper No. 7108)

50. MOYO: LESS AID - MORE BUSINESS
Africa and the IMF – Mark Ellyne 52
• Advanced economies should reduce aid
while increasing trade
• LIC governments should use bond markets
to raise funds—not the central bank or
donor grants
• LICs should welcome foreign investment
• Governments must make “Doing
Business” easier
1/29/2015

51. PAUL COLLIER
1/29/2015Africa and the IMF – Mark Ellyne 53
• The Natural Resource Trap - The
exploitation of Africa’s prolific natural
resources encourages rent seeking
(payments for nonproductive work),
and can stifle other economic activity
(Dutch Disease).
• Africa is heavily dependent on a small
number of primary exports that have
shown long-term price declines
(terms of trade declines) and high
volatility.

52. PAUL COLLIER
1/29/2015Africa and the IMF – Mark Ellyne 54
• Political risk is results
from conflict and is one
of the greatest risk
factors reducing
investment in Africa.
• Ethnic loyalty to leaders,
regardless of their
competence/performanc
e, reduce their incentive
to perform well.

53. PAUL COLLIER
1/29/2015Africa and the IMF – Mark Ellyne 55
• The Conflict Trap - civil
wars and coups have an
estimated average cost
of $64bn each,
according to Collier.

54. POLITICAL RISK IS HIGH IN AFRICA
1/29/2015Africa and the IMF – Mark Ellyne 56
2009: Index of Failed States
• Top 5 failed states were in Africa (Somalia,
Chad, Sudan, Zimbabwe, DRC)
• 10 of top 15 in Africa
• 21 of 37 States that US Government has on
its Alert list for Failed States are in Africa

55. AVERAGE CORRUPTION PERCEPTION INDEX:
AFRICAN COUNTRIES IN YELLOW (2010)
1/29/2015Africa and the IMF – Mark Ellyne 57
2010
Country
Rank
Country / Territory
101 Dominican Republic
101 Sao Tome and Principe
101 Tonga
101 Zambia
105 Algeria
105 Argentina
105 Kazakhstan
105 Moldova
105 Senegal
110 Benin
110 Bolivia
110 Gabon
110 Indonesia
110 Kosovo
110 Solomon Islands
116 Ethiopia
116 Guyana
116 Mali
116 Mongolia
116 Mozambique
116 Tanzania
116 Vietnam
123 Armenia
123 Eritrea
123 Madagascar
123 Niger
127 Belarus
127 Ecuador
127 Lebanon
127 Nicaragua
127 Syria
127 Timor-Leste
127 Uganda
134 Azerbaijan
134 Bangladesh
134 Honduras
134 Nigeria
134 Philippines
134 Sierra Leone
134 Togo
134 Ukraine
134 Zimbabwe
143 Maldives
143 Mauritania
143 Pakistan
146 Cameroon
146 Côte d´Ivoire
146 Haiti
146 Iran
146 Libya
146 Nepal
146 Paraguay
146 Yemen
2010
Country
Rank
Country / Territory
154 Cambodia
154 Central African Republic
154 Comoros
154 Congo
154 Guinea-Bissau
154 Kenya
154 Laos
154 Papua New Guinea
154 Russia
154 Tajikistan
164 Congo, Dem Rep
164 Guinea
164 Kyrgyzstan
164 Venezuela
168 Angola
168 Equatorial Guinea
170 Burundi
171 Chad
172 Sudan
172 Turkmenistan
172 Uzbekistan
175 Iraq
176 Afghanistan
176 Myanmar
178 Somalia
2010
Country
Rank
Country / Territory
1 Denmark
1 New Zealand
1 Singapore
4 Finland
4 Sweden
6 Canada
7 Netherlands
8 Australia
8 Switzerland
10 Norway
11 Iceland
11 Luxembourg
13 Hong Kong
14 Ireland
15 Austria
15 Germany
17 Barbados
17 Japan
19 Qatar
20 United Kingdom
21 Chile
22 Belgium
22 United States
24 Uruguay
25 France
26 Estonia
27 Slovenia
28 Cyprus
28 United Arab Emirates
30 Israel
30 Spain
32 Portugal
33 Botswana
33 Puerto Rico
33 Taiwan
36 Bhutan
37 Malta
38 Brunei
39 Korea (South)
39 Mauritius
41 Costa Rica
41 Oman
41 Poland
44 Dominica
45 Cape Verde
46 Lithuania
46 Macau
48 Bahrain
49 Seychelles
50 Hungary
50 Jordan
50 Saudi Arabia
2010
Country
Rank
Country / Territory
53 Czech Republic
54 Kuwait
54 South Africa
56 Malaysia
56 Namibia
56 Turkey
59 Latvia
59 Slovakia
59 Tunisia
62 Croatia
62 Macedonia, FYR
62 Ghana
62 Samoa
66 Rwanda
67 Italy
68 Georgia
69 Brazil
69 Cuba
69 Montenegro
69 Romania
73 Bulgaria
73 El Salvador
73 Panama
73 Trinidad and Tobago
73 Vanuatu
78 China
78 Colombia
78 Greece
78 Lesotho
78 Peru
78 Serbia
78 Thailand
85 Malawi
85 Morocco
87 Albania
87 India
87 Jamaica
87 Liberia
91 Bosnia and Herzegovina
91 Djibouti
91 Gambia
91 Guatemala
91 Kiribati
91 Sri Lanka
91 Swaziland
98 Burkina Faso
98 Egypt
98 Mexico

56. HAS THE IMF CHANGED SINCE SAPS?
1/29/2015Africa and the IMF – Mark Ellyne 58
The 2nd Generation of Reforms:
• Concern about poverty; creation of the
Poverty Reduction and
Growth Facility (1999)
• Emphasis on good governance
(accountability and transparency in public
finances)
• Demands government ownership of policies

57. HAS THE IMF CHANGED SINCE SAP?
59
• Increased concern over financial
system regulation and supervision
• Provides more capacity building and
technical assistance
• Offered debt relief for first time
(MDRI, 2006)
1/29/2015Africa and the IMF – Mark Ellyne

58. SOME OLD MESSAGES PERSIST
60
• Growth is the key to poverty reduction
• International trade and foreign investment
(new technology) are critical for long-term
growth
• Governments must avoid excessive
domestic and foreign debt
• African countries need more flexible
exchange rates, and more flexible goods
and labour markets
1/29/2015Africa and the IMF – Mark Ellyne

59. THE ALTERNATIVES TO THE BWIS
• Hold more reserves to protect against
shocks
• Need more commercial borrowing
(expensive)
• Take more bilateral aid (more political
strings attached)
Mark Ellyne - Do We Need the
IMF
61

60. AFRICA IS EXPERIENCING A RESURGENCE
OF GROWTH SINCE 2000
1/29/2015Africa and the IMF – Mark Ellyne 62
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
1,000.0
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
African GDP per Capita in US$

61. AFRICA’S NEW GROWTH SURGE?
1/29/2015Africa and the IMF – Mark Ellyne 63
Average GDP growth rates (in Percent)
1980-1990 1991-2000 2001-2012
World 3.2 3.2 3.6
Advanced Economies 3.1 2.8 1.6
Developing Asia 6.6 7.3 8.4
Latin America 2.0 3.1 3.4
Sub-Saharan Africa 2.6 2.3 5.6

62. SINCE THE MID-1990S, TFP GROWTH HAS GENERALLY IMPROVED
1985-89 1990-94 1995-99 2000-06
Sub-Saharan Africa
Real GDP growth 3.5 1.7 4.4 4.2
Factor accumulation 3.2 3.0 3.3 3.0
TFP growth 0.3 -1.3 1.1 1.2
High-growth countries
Real GDP growth 5.1 2.7 7.3 5.1
Factor accumulation 4.0 3.9 4.8 3.3
TFP growth 1.1 -1.2 2.5 1.8
Low-growth countries
Real GDP growth 3.7 2.8 2.3 1.1
Factor accumulation 2.5 2.9 2.7 2.2
TFP growth 1.2 -0.1 -0.4 -1.1
HIPC post-completion point countries
Real GDP growth 2.6 0.6 4.3 5.2
Factor accumulation 3.2 2.9 3.1 3.4
TFP growth -0.6 -2.3 1.2 1.8
Fragile countries 1
Real GDP growth 2.3 1.7 1.7 0.8
Factor accumulation 2.4 2.2 2.0 1.6
TFP growth -0.1 -0.5 -0.3 -0.8
Source: IMF, World Economic Outlook and staff calculations.
1
Excluding HIPC post-completion point countries (The Gambia,
Sao Tome and Principe, and Sierra Leone).
Sources of Growth in Sub-Saharan Africa: 1985-2006

63. Summary of key messages
• Until the mid-1990s, growth in SSA was driven
primarily by factor accumulation in all country groups.
• Since the mid-1990s, TFP growth has improved strongly
in all country groups, except for fragile countries.
• TFP accelerations associated with improvements in
terms of trade, higher aid, and lower economic and
social instability
• CFA zone countries have a propensity for TFP
decelerations
Dan Ghura (2007). Growth Accounting in Africa, IMF
Conclusions and Policy Implications
66

64. IS AFRICAN RESURGING?
1/29/2015Africa and the IMF – Mark Ellyne 67
Just a fluke:
• Just a commodity boom
• Due to China and India
• No real industrialization
This time is different:
• More democracy and ownership
• More institutional development
• More consumerism
• More beneficiation

65. BWI/IMF BALANCE SHEET
68
PROs
Facilitatesinternational
cooperation
Provides public
informationon all
economies
Technicalassistanceand
policy advice
Provides lender of last
resort financing
Voicefor Africa(LICs)
CONs
Economic
policeman/auditor
Requirespolicy
conditionality(evenif
countyis not be ready)
Favourscreditorsover
debtors
Favoursefficiency(private)
over equity (government)
Overly conservative
1/29/2015Africa and the IMF – Mark Ellyne

66. IMF IS DISLIKED BY ALL SIDES
Africa and the IMF – Mark Ellyne 69
From the right: Nationalists are dislike
supranational institutions;
From the left: Socialists dislike polices that
hurt poor elements of society;
IMF is run by rich countries;
IMF follows bad “neoliberal” policies.
1/29/2015

67. DISCUSSION
72
Is the IMF (BWIs) a conspiracy to
undermine the economies of low
income countries?
Are Africa’s problems a result of
discrimination, bad advice, or poor
policy implementation?
Should the IMF (BWIs) be replaced?
And with what?
1/29/2015Africa and the IMF – Mark Ellyne