Fifty Years of Economic Growth in Sub-Saharan Africa Diéry Seck 9 july 2018

50 years after independence of most African countries: What is the economic record ? What has worked, or not? What were the opportunities? What could happen in the next half century?

Study has 3 parts Economic and statistical record of all countries Estimation of the very long term determinants of economic growth in SSA countries Estimation of the long term trajectories of GDP of SSA countries

Part 1: Economic and statistical record over half a century

Statistics: 4 moments Average GDP growth Variability of GDP growth Symmetry of distribution of growth Density of distribution of growth

Table 1. STATISTICS OF GDP GROWTH OF OECD MEMBERS AND SUB-SAHARAN AFRICAN COUNTRIES, 1967-2016 Country Name Average Standard Coeff. Of Skewness Kurtosis   deviation variation OECD members 2.814 1.708 60.7 -0.709 2.632 Angola 4.752 8.519 179.3 -0.815 3.942 Benin 3.669 3.030 82.6 -0.748 1.122 Botswana 8.595 6.275 73.0 0.611 1.602 Burkina Faso 4.591 3.125 68.1 -0.091 -0.945 Burundi 2.618 5.408 206.6 0.734 2.101 Cameroon 3.786 5.839 154.2 0.099 1.900 Cabo Verde 6.610 4.906 74.2 0.513 -0.386 Central African Republic 1.197 6.615 552.8 -3.769 20.998 Chad 3.976 8.804 221.4 0.298 2.712 Comoros 2.353 3.006 127.7 -0.179 2.683 Congo, Dem. Rep. 1.206 5.352 443.8 -0.598 -0.107 Congo, Rep. 4.424 5.671 128.2 0.658 2.490 Cote d'Ivoire 3.503 4.828 137.8 -0.187 0.284 Equatorial Guinea 15.825 28.354 179.2 3.139 13.486 Eritrea 3.784 6.586 174.0 0.623 1.695 Ethiopia 5.647 6.647 117.7 -0.847 -0.060 Gabon 3.960 9.858 248.9 0.875 5.243 Gambia, The 3.802 3.407 89.6 -0.004 0.177 Ghana 3.803 4.438 116.7 -1.245 3.227 Guinea 3.920 1.622 41.4 -0.985 3.052 Guinea-Bissau 2.706 6.874 254.0 -2.075 8.926 Kenya 4.663 4.123 88.4 1.719 6.756 Lesotho 4.764 5.831 122.4 1.120 5.627 Liberia 1.756 20.796 1184.3 1.964 12.662 Madagascar 2.015 4.159 206.4 -1.233 2.985 Malawi 4.101 4.792 116.8 -0.331 2.163 Mali 4.143 5.065 122.2 0.628 1.411 Mauritius 4.560 3.095 67.9 -2.386 11.644 Mozambique 5.610 6.963 124.1 -0.343 3.367 Namibia 3.496 2.920 83.5 0.504 0.822 Niger 2.330 5.912 253.8 -1.165 2.813 Nigeria 4.166 8.576 205.9 0.742 2.908 Rwanda 5.239 10.232 195.3 -2.677 17.830 Sao Tome and Principe 4.972 2.033 40.9 0.535 -0.823 Senegal 3.020 3.713 122.9 0.219 Seychelles 4.492 6.109 136.0 0.320 0.147 Sierra Leone 2.572 7.553 293.7 -0.193 3.593 South Africa 2.703 2.273 84.1 -0.318 -0.521 Swaziland 5.221 91.8 1.351 1.588 Tanzania 5.323 2.155 40.5 -0.569 -0.481 Togo 3.132 5.384 171.9 -0.352 1.891 Uganda 5.844 2.996 51.3 -0.809 1.675 Zambia 3.209 4.114 -0.502 -0.184 Zimbabwe 2.926 7.805 266.7 -0.248 0.727 Source of data: World Development Indicators, WB

Table 2. STATISTICS OF GDP GROWTH OF OECD MEMBERS AND SSA COUNTRIES BEFORE AND AFTER INCEPTION OF STRUCTURAL ADJUSTMENT PROGRAMS (SAPs) (1967 - 2016) Country Name Average Standard Difference   1967-1990 deviation 1991-2016 in averages OECD members 3.636 1.625 2.056 1.404 -1.581 Angola 3.280 3.101 5.036 9.176 1.756 Benin 2.955 3.964 4.328 1.498 1.373 Botswana 12.916 5.451 4.607 3.894 -8.309 Burkina Faso 3.476 3.428 5.620 2.393 2.143 Burundi 4.297 6.066 1.068 4.156 -3.229 Cameroon 4.463 7.683 3.162 3.207 -1.302 Cabo Verde 5.279 2.759 7.121 5.428 1.842 Central African Republic 1.684 4.135 0.747 8.244 -0.936 Chad 1.935 8.447 5.861 8.705 3.927 Comoros 2.956 2.511 2.122 3.146 -0.835 Congo, Dem. Rep. 1.123 4.025 1.283 6.333 0.160 Congo, Rep. 5.883 7.047 3.078 3.496 -2.806 Cote d'Ivoire 4.140 5.544 2.916 3.966 -1.224 Equatorial Guinea 2.867 4.305 20.809 31.885 17.942 Eritrea n.a 3.784 6.586 Ethiopia 2.394 7.013 6.773 6.126 4.378 Gabon 5.720 13.455 2.336 3.781 -3.384 Gambia, The 4.356 3.731 3.291 2.989 -1.066 Ghana 1.965 5.351 5.500 2.335 3.534 Guinea 4.484 1.116 3.833 1.670 -0.651 Guinea-Bissau 3.204 7.089 2.323 6.678 -0.881 Kenya 5.722 5.186 3.687 2.422 -2.035 Lesotho 5.647 8.076 3.950 1.948 -1.696 Liberia -1.976 12.208 5.201 25.872 7.176 Madagascar 1.581 3.840 2.415 4.395 0.833 Malawi 4.029 4.113 4.169 5.341 0.140 Mali 3.447 6.153 4.759 3.748 1.312 Mauritius 4.595 4.650 4.541 1.760 -0.054 Mozambique 0.500 8.317 7.576 5.160 7.076 Namibia 1.202 2.774 3.177 Niger 0.655 7.132 3.876 3.910 3.221 Nigeria 3.156 10.322 5.097 6.426 1.941 Rwanda 4.480 5.178 5.940 13.250 1.460 Sao Tome and Principe 4.972 2.033 Senegal 2.166 4.819 3.809 1.944 1.643 Seychelles 5.326 7.351 3.722 4.545 -1.604 Sierra Leone 2.173 3.633 2.940 9.861 0.766 South Africa 2.943 2.527 2.481 1.986 -0.461 Swaziland 7.898 6.064 1.607 -4.736 Tanzania 5.405 1.640 5.317 2.190 -0.088 Togo 3.306 5.047 2.972 5.672 -0.333 Uganda 3.444 3.804 6.582 2.229 3.139 Zambia 1.621 3.740 4.674 3.895 3.053 Zimbabwe 5.136 6.252 0.886 8.510 -4.250 Source of data: World Development Indicators (WDI), WB

African economies before and after SAPs Two equal periods: 1967-1990; 1991-2016 All SSA countries except South Sudan

Table 3. GROWTH RATES OF PER CAPITA GDP OF SSA COUNTRIES Country Name AverageGrowth rate Average Growth rate   1967-2016 1967-1990 1991-2016 OECD members 2.81 3.64 2.06 Angola 4.75 3.28 5.04 Benin 3.67 2.95 4.33 Botswana 8.60 12.92 4.61 Burkina Faso 4.59 3.48 5.62 Burundi 2.62 4.30 1.07 Cameroon 3.79 4.46 3.16 Cabo Verde 6.61 5.28 7.12 Central African Republic 1.20 1.68 0.75 Chad 3.98 1.93 5.86 Comoros 2.35 2.96 2.12 Congo, Rep. 1.21 1.12 1.28 Cote d'Ivoire 4.42 5.88 3.08 Equatorial Guinea 3.50 4.14 2.92 Eritrea 15.82 2.87 20.81 Ethiopia 3.78 n.a Gabon 5.65 2.39 6.77 Gambia, The 3.96 5.72 2.34 Ghana 3.80 4.36 3.29 Guinea 1.97 5.50 Guinea-Bissau 3.92 4.48 3.83 Kenya 2.71 3.20 2.32 Lesotho 4.66 3.69 Liberia 4.76 3.95 Madagascar 1.76 -1.98 5.20 Malawi 2.01 1.58 2.41 Mali 4.10 4.03 4.17 Mauritius 3.45 Namibia 4.56 4.54 Niger 5.61 0.50 7.58 Nigeria 4.38 Rwanda 2.33 0.65 3.88 Sao Tome and Principe 5.10 Senegal 5.24 5.94 Seychelles 4.97 Sierra Leone 3.02 2.17 3.81 South Africa 4.49 5.33 3.72 Swaziland 2.57 2.94 Tanzania 2.70 2.48 Togo 5.22 7.90 Uganda 5.32 5.40 Zambia 3.13 3.31 2.97 Zimbabwe 5.84 3.44 6.58 Source of data: World Development Indicators (WDI), W B

Economic convergence of SSA countries towards OECD countries

Table 4. CONVERGENCE OF PER CAPITA GDP Country Name Ratio   1967-69 2014-2016 OECD members 100.0 Angola n.a 9.7 Benin 3.6 2.2 Botswana 3.4 19.6 Burkina Faso 1.7 Burundi 1.5 0.6 Cameroon 5.7 3.9 Cabo Verde 8.9 Central African Republic 3.7 0.8 Chad 2.4 Comoros 2.0 Congo, Rep. 9.5 7.6 Cote d'Ivoire 10.6 Equatorial Guinea 37.2 Eritrea Ethiopia 1.3 Gabon 41.0 25.2 Gambia, The 2.7 1.4 Ghana 6.3 4.4 Guinea 1.9 Guinea-Bissau Kenya 4.0 2.9 Lesotho 3.5 Liberia 1.0 Madagascar 4.5 1.1 Malawi Mali Mauritius 25.0 Namibia 15.9 Niger Nigeria 7.5 6.7 Rwanda Sao Tome and Principe 3.3 Senegal 6.2 2.8 Seychelles 20.8 35.9 Sierra Leone South Africa 36.6 19.9 Swaziland 10.4 Tanzania Togo Uganda Zambia 10.2 4.3 Zimbabwe 6.0 2.5 Note: Ratio is 3 year average of of country per capita GDP over 3 year average of OECD members per capita GDP Source of data: World Development Indicators (WDI), WB

Part 2: The very long term determinants of GDP growth

The controversy over determinants of growth More than 60 candidate determinants and a lot of ideology: see the list

Estimation of the long term determinants of GDP growth: a cross-section model for 44 SSA countries Inflation Gross investment / GDP Trade / GDP (Trade openness) Initial income (Per capita GDP in 1980, convergence) Population size (in 1990) Landlocked

Regression of GDP growth on investment and trade opennes

Lessons for very long term cause of economic growth Commit to high levels of investment and trade openness Control level of inflation More additional variables could be investigated but the model already explains 65% of the variation of GDP growth

Thank you.