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Growth in Sub-Saharan Africa is Diverging

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Stagnating incomes in sub-Saharan Africa’s resource-intensive economies necessitate more effective fiscal management and broad-based structural reforms

Sub-Saharan Africa is home to nine of the world’s top twenty fastest-growing economies this year. Such startling statistics, however, rarely feature in discussions of the region’s outlook. Instead, headline figures typically emphasize the relatively modest average economic performance. This disconnect reflects a two-track growth pattern, where a significant part of the region underperforms. Our analytical note for the latest Regional Economic Outlook for sub-Saharan Africa takes a closer look at this issue.

Over the past ten years, growth in sub-Saharan Africa’s resource-intensive countries (RICs)—and especially in fuel exporting economies such as Angola, Chad, and Nigeria—has slowed down sharply, falling far below growth in non-RICs (such as Ethiopia, Rwanda, and Senegal). Indeed, incomes in RICs have essentially stagnated. This marks a sharp contrast with the decade leading up to 2014, when RICs experienced rapid growth, in line with the region’s strong overall performance.

The post–2014 divergence between RICs and non-RICs has been driven largely by the combination of two factors.

First, RICs and especially fuel exporters experienced a dramatic decline in their commodity export prices around 2014–15, as the commodity “super-cycle”—a period of sharply rising commodity prices—came to an end. Since then, the terms-of-trade decline has only been partially reversed.

Second, and critically, the impact of the terms-of-trade shock on RICs was exacerbated by pre-existing structural vulnerabilities, including a poor business environment, limited human capital, weak governance, and poor management of resource revenues.

Structural Weaknesses

Weak governance, systemic corruption, and an unfavorable business climate take a toll on productivity and output—and the effects are most striking when commodity prices fall. Such weaknesses affect both the resource sector itself and prospects for the economy diversifying into other sectors. For instance, the potential for theft of oil production undermines productive efficiency and diverts precious resources from more productive uses. Or weak governance can be a central impediment for private sector investment more broadly. Fuel exporters outside the region, with generally stronger governance, have weathered the commodity price slump far better.

IMF staff analysis confirms that terms-of-trade shocks have a stronger and longer-lasting impact on growth in countries with weak governance. We estimate that for every one-percent worsening in a country’s terms of trade, medium-term growth is around ¼ percentage point higher in countries with smaller governance challenges.

In addition, poor resource management reinforced the original shock through a pro-cyclical fiscal bias. Fiscal policy in RICs, including in sub-Saharan Africa, is generally far more correlated with economic shocks, intensifying their effects, compared to other countries. For instance, when commodity prices are high, many RICs, particularly fuel exporters, have embarked on costly capital projects that are often poorly planned and implemented, with corresponding sharp reductions in capital spending when commodity prices fall. In addition, many fuel exporters also provide sizable fuel subsidies, the cost of which increases as oil prices rise, limiting their ability to save during booms, while crowding out growth-friendly development spending. The average oil-exporting country in sub-Saharan Africa has since 2011 consistently spent all its oil revenues in the year when they accrued.

The Way Forward

Reversing this growth divergence is a regional priority, as RICs make up about two-thirds of sub-Saharan Africa’s GDP and population. It is also a humanitarian priority. Poor growth performance has translated into poor development outcomes—progress in tackling poverty in RICs effectively halted in 2014. Compared to children in other parts of the region, a child born in a RIC today is expected to live 4 years less on average, and is 25 percent more likely to live in poverty.

Reigniting durable growth will require a stable macroeconomic environment. More prudent and consistently implemented fiscal frameworks can help address poor resource management challenges—and also help ensure growth is more resilient going forward. Further, broad-based reforms to address structural weaknesses—strengthening governance, enhancing the business environment, accumulating human capital, and addressing infrastructure bottlenecks—can help countries diversify and grow. And for fuel exporters, facing the global green-energy transition, the need to diversify is ever more urgent.

Saad Quayyum and Nikola Spatafora are senior economists, Sanghamitra Mukherjee is an economist, and Hamza Mighri is a research analyst, all in the IMF’s African Department.

Tourism, Peace, and Security: Interconnections and Impacts

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Tourism, as one of the world’s largest and most dynamic industries, plays a significant role in fostering economic growth, cultural exchange, and international understanding. Beyond its economic and cultural contributions, tourism also holds a unique position in promoting peace and security. However, its relationship with peace and security is complex, reciprocal, and heavily influenced by global and regional dynamics.

Tourism fosters peace by encouraging cross-cultural interactions, building mutual respect, and reducing prejudice. As individuals travel and experience diverse cultures, they often develop a deeper understanding of the values and traditions of others, helping to break down stereotypes and foster global solidarity. Several key mechanisms through which tourism promotes peace include the following:

Cultural Exchange and Understanding: Tourism facilitates encounters between people of different backgrounds, creating opportunities for dialogue and collaboration. This cultural exchange can bridge gaps in understanding, reduce tensions, and contribute to a more harmonious world.

Economic Stability and Cooperation: In many regions, tourism is a significant source of income, providing jobs and promoting regional development. Economic interdependence through tourism can encourage countries and communities to maintain peaceful relations to protect shared interests.

Heritage and Unity: Heritage tourism highlights the universal value of historical and cultural sites, emphasizing shared human achievements. Protecting such sites requires cooperation, often leading to international agreements and collective action.

Tourism thrives in environments where travelers feel safe and secure. Conversely, instability and violence can severely disrupt tourism, causing economic and social setbacks. The interplay between peace and tourism can be observed in several contexts.

Conflict and Its Consequences: Armed conflicts, political instability, and terrorism have immediate and far-reaching effects on tourism. Destinations experiencing such challenges often see drastic declines in visitor numbers, loss of revenue, and long-term reputational damage.

Post-Conflict Recovery: Once peace is restored, tourism can be a powerful tool for rebuilding. Post-conflict destinations often rely on tourism to attract investment, revive local economies, and rebuild their international image.

Safety Perceptions: Even perceived threats can impact tourism. Natural disasters, health crises, or geopolitical tensions may deter visitors, underscoring the importance of effective risk management and communication.

Tourism contributes to peace-building efforts by promoting stability, inclusivity, and sustainable development. Governments and organizations increasingly recognize the role of tourism in fostering secure environments. Key initiatives include the following:

Policy and Partnerships: International tourism organizations, such as the UN World Tourism Organization (UNWTO), advocate for policies that integrate tourism into peace-building and conflict prevention strategies.

Community Involvement: Engaging local communities in tourism development ensures that the benefits of tourism are widely distributed. Inclusive tourism initiatives reduce inequality and foster a sense of ownership, contributing to social cohesion.

Sustainability and Resilience: Sustainable tourism practices protect natural and cultural resources while minimizing risks associated with overtourism and environmental degradation. Resilient tourism systems can adapt to crises, maintaining stability even in challenging circumstances.

Despite its potential, tourism faces challenges in contributing to peace and security. These include managing over tourism, addressing environmental concerns, and ensuring equitable benefits. Additionally, tourism’s reliance on stability makes it vulnerable to global uncertainties, such as pandemics and geopolitical tensions.

To harness tourism’s full potential as a force for peace, stakeholders must prioritize – Sustainable Practices: Emphasizing sustainability ensures that tourism supports long-term development without depleting resources or exacerbating inequalities.

Global Cooperation – Collaborative efforts among governments, businesses, and communities are essential for creating safe and inclusive tourism experiences.

Crisis Management – Developing robust frameworks to address risks and recover from disruptions is critical to maintaining tourism’s role in peace-building.

To conclude, tourism is a powerful bridge between cultures and nations, promoting understanding, stability, and economic prosperity. While its relationship with peace and security is multifaceted, the potential for tourism to contribute to a more harmonious world is undeniable. By fostering dialogue, inclusivity, and resilience, tourism can be a beacon of hope in an increasingly interconnected yet divided world. For nations, communities, and travelers alike, embracing tourism as a tool for peace and security holds promise for a brighter future.

Ethiopian Student elected as Huawei Seeds for the Future 2025 Global Ambassador

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The prestigious Seeds for the Future program, Huawei’s flagship Corporate Social Responsibility (CSR) initiative, has announced its 2025 Global Ambassadors. Among the twelve selected ambassadors is Asiya Kelifa, a fourth-year Computer Science student at Selale University in Ethiopia.
Seeds for the Future aims to empower young talents from around the globe to deepen their understanding of digital technology and innovation through short-term training programs, global competitions, and ongoing alumni activities. Emphasizing the importance of cross-cultural exchanges and the cultivation of an entrepreneurial spirit, the program is committed to diversity and inclusivity, with a participation rate of at least one-third for female students.
Asiya Kelifa’s election as a Global Ambassador follows her successful participation in the Seeds for the Future 2024 program. This honor grants her the opportunity to gain hands-on experience in the ICT Talent Digital Tour set to take place in China in 2025, as well as the chance to share knowledge with international audiences at significant events.
The Global Ambassador Program is designed to foster a robust community of Seeds for the Future alumni dating back to its inception in 2008. It seeks to expand the program’s global reach while enhancing learning and networking opportunities for participants. The initiative empowers young leaders to champion the program’s core values: Digitalization, Innovation, Entrepreneurship, and Sustainability.
The selection process for the Global Ambassadors involves an application submission via the program’s website, where candidates provide their resumes and respond to six focused interview questions aimed at assessing their insights and perspectives.

Rethinking Economics: The Need for Collective Action in a Finite World

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In contemporary discussions about economics, the dominant narrative is often shaped by neoliberal ideology, which emphasizes individualism and self-interest as the primary drivers of human behavior. This perspective posits that individuals are constantly seeking to maximize their own benefits, a notion that has become entrenched in both economic theory and public policy. However, a closer examination of our evolutionary history reveals a more nuanced truth: humanity’s ascent to dominance was largely due to our ability to prioritize collective interests over individual gain. This fundamental insight challenges the core tenets of neoliberalism and raises critical questions about how we can effectively address the pressing challenges facing our planet today.

At its core, neoliberalism operates on a simplistic binary: the individual is good, while the collective or the state is bad. This dichotomy not only oversimplifies complex social dynamics but also undermines the very foundations of human cooperation that have allowed our species to thrive. Throughout history, it has been our capacity for collaboration—whether through social structures, communal living, or organized governance—that has enabled us to overcome challenges and adapt to changing environments. If we are to navigate the complexities of life on a finite planet, we must reconsider the role of the state—not as an adversary but as an essential force for collective well-being.

The dilemma of neoliberalism becomes particularly evident when we consider the urgent issues confronting our world today: climate change, resource depletion, economic inequality, and social unrest. These challenges cannot be adequately addressed through individualistic approaches alone. Instead, they require coordinated efforts that prioritize the common good over personal profit. The notion that market forces alone can resolve these crises is not only misguided; it is dangerously naïve. Without a robust framework for collective action and state intervention, we risk exacerbating existing inequalities and undermining our ability to create sustainable solutions.

Moreover, we are now grappling with what can be termed “junk science,” a phenomenon that often accompanies junk economics. As humanity faces existential threats, including climate change and biodiversity loss, it is both absurd and irresponsible to boast about our potential for space exploration while neglecting the urgent need to address our problems here on Earth. The idea that we can conquer the cosmos while struggling to manage our own planet is not only preposterous but also dangerously distracting.

The current fascination with space travel—often driven by wealthy entrepreneurs seeking profit rather than genuine scientific inquiry—diminishes the credibility of legitimate scientific fields like astronomy and cosmology. By redefining outer space as merely 50 kilometers from Earth’s surface, we trivialize the complexities of true space exploration and divert attention from pressing issues at home. This obsession with grand narratives about space exploration serves to mesmerize the public and maintain the status quo while simultaneously detracting from the urgent need for systemic change in how we live and interact with our environment.

The implications of this distraction are profound. As resources become increasingly scarce and environmental degradation accelerates, society must focus on sustainable practices that protect our life support systems on Earth. We cannot afford to be sidetracked by visions of interstellar travel while neglecting the fundamental issues that threaten our survival as a species. Instead of investing in speculative ventures that promise to take us beyond our planet, we should direct our energies toward addressing climate change, restoring ecosystems, and ensuring equitable access to resources for all.

To move forward effectively, we need a paradigm shift that values collective action and recognizes the importance of state intervention in addressing economic disparities and environmental challenges. This requires rethinking our approach to economics—shifting from a model that prioritizes individual profit to one that emphasizes community well-being and ecological sustainability.

One way to achieve this shift is by fostering a new economic framework grounded in principles of cooperation and solidarity. This framework would prioritize investments in public goods—such as education, healthcare, infrastructure, and environmental protection—that benefit society as a whole rather than just a select few. By focusing on collective needs rather than individual desires, we can create a more equitable distribution of resources and opportunities.

This new economic model should embrace innovation in sustainable practices and technologies that promote environmental stewardship. Rather than viewing nature solely as a resource to be exploited for profit, we must recognize its intrinsic value and work toward harmonious coexistence with our planet. This means investing in renewable energy sources, sustainable agriculture practices, and conservation efforts that protect biodiversity.

Addressing economic inequality must be central to any new economic paradigm. The neoliberal emphasis on deregulation and privatization has led to widening gaps between rich and poor—both within countries and globally. A more equitable economy would ensure fair wages for workers, access to quality education for all individuals regardless of their background, and social safety nets that protect vulnerable populations from economic shocks.

The role of government in this new framework cannot be understated. Rather than being viewed as an impediment to progress, the state should be seen as a facilitator of collective action—creating policies that promote social welfare while regulating industries to prevent exploitation and environmental harm. Effective governance can help ensure that economic activities align with societal goals rather than merely serving private interests.

If humanity is to thrive on this finite planet, it is imperative that we challenge the prevailing neoliberal dogmas that prioritize individualism over collectivism. By recognizing the importance of cooperation and collective action in addressing global challenges, we can create an economic framework that not only promotes prosperity but also safeguards our environment for future generations. It is time to liberate ourselves from “junk science” and “junk economics”—to embrace a vision of progress rooted in sustainability, equity, and shared responsibility for our planet’s future. Only then can we hope to navigate the complexities of existence on Earth while aspiring toward a brighter tomorrow for all.