Regional economic outlook: Sub-Saharan Africa: Capital flows and the future of work

The macroeconomic outlook for sub-Saharan Africa continues to strengthen. Growth is expected to increase from 2.7 percent in 2017 to 3.1 percent in 2018, reflecting domestic policy adjustments and a supportive external environment, including continued steady growth in the global economy, higher commodity prices, and accommodative external financing conditions. While fiscal imbalances are being contained in many countries, the adjustment has typically occurred through a combination of higher commodity revenues and sharp cuts in capital spending, with little progress on domestic revenue mobilization. Over the medium term, and on current policies, growth is expected to accelerate to about 4 percent, too low to absorb the likely flow of new entrants into labor markets. The outlook is surrounded by significant downside risks, particularly considering the elevated policy uncertainty in the global economy. Shielding the recovery and raising medium-term growth would require reducing debt vulnerabilities and creating fiscal space through more progress on domestic revenue mobilization, and policies to achieve strong sustainable and inclusive growth.