WORKING PAPER 04 - May 1, 2019
KEYWORDS: economic, India, Africa, world, south, food, exports, imports, growth, loans
It is time to discard the image of Africa as a low-income region that relies on aid, trade and investment relationships with high income Europe and North America. This paper, along with three companion papers on Africa’s economic growth, public debt, and relations with China, paints a picture of a subcontinent that is becoming a middle-income region with ever strengthening economic relations with middle-income countries in other parts of the world, especially Asia. India's economic relations with African countries have been growing since the global financial crisis and, though it trails China by a lot, it is now Africa's second most important trade partner. While India's exports of healthcare services to Africa get a lot of press, but perhaps the most beneficial trade between the two subcontinents has been in pharmaceuticals, because of its contribution to the containment of HIV/AIDS and Meningitis A. India’s other exports are fuels, chemicals, agricultural goods, and machinery; still largely complementary to China's activities in Africa, but gradually becoming more competitive.
WORKING PAPER 03 - May 1, 2019
KEYWORDS: China, Africa, Sub-Saharan Africa, trade, energy, development finance, debt, transport, FDI
Because of the lack of reliable data, it is difficult to reliably answer the questions that many people are asking about China's activities in Africa: are the modes and magnitudes of Chinese finance creating unsustainable public finance and economic trajectories and — if they are — whose fault is it? Based on the available information and a rough analysis of the match between China's activities and Africa's development demands, we conclude that Chinese finance appears to have helped development on the subcontinent and has not — by itself — jeopardized its public finances: while public debt to GDP ratios have risen in the top ten recipients of Chinese loans, debt to China is generally a small portion of their external public debt. But China’s role in the debt dynamics of some of these countries — that is, the speed at which their external public debt is growing — provides more reason to worry.
WORKING PAPER 02 - May 1, 2019
KEYWORDS: public debt, middle-income countries, debt crisis, debt dynamics, Sub-Saharan Africa, debt relief
Several African countries are headed into another debt crisis, just a decade or so after their slates had been wiped clean by debt relief. This is based on an assessment of country-specific debt dynamics: the debt to GDP ratios, the rate of growth of debt, the terms at which debt is being contracted relative to economic growth rates, and the willingness of governments to run primary budget surpluses if necessary.
WORKING PAPER 01 - April 22, 2019
KEYWORDS: growth, growth prospects, middle-income countries, energy access, infrastructure, education, domestic revenues, domestic revenue mobilization, Sub-Saharan Africa
Several smaller economies such as Ethiopia, Rwanda, and Senegal are showing that African transformations can be as rapid as those in Asia. These economies deserve international recognition and support because they will inspire others through example. But Sub-Saharan Africa's prospects will depend mainly on what happens in Nigeria, South Africa, and Angola, the three largest middle-income economies that together add up to almost two thirds of the region's economy. The economic outlook does not look good even if oil and commodity prices increase, because these countries have many of the structural attributes more typical of low-income countries in other parts of the world. We discuss three development deficits that may be the most critical: access to electricity, the quality of education, and domestic revenues.