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This paper documents the steady increase in intraregional trade in sub-Saharan Africa since 1980, links this rise to important growth spillovers in the region, and identifies the main source countries and those most vulnerable to the economic conditions of others. Estimates show that in the short run, positive idiosyncratic shocks to regional trading partners’ growth significantly increase growth in the average sub-Saharan African country, while in the long-run the annual impact of growth in regional trading partner’s is smaller in magnitude. Policy implications including the need to support further continent-wide integration and the associated growth spillovers are discussed. Actions policymakers in sub-Saharan Africa can take to capture the benefits of these spillovers, while limiting exposure to the associated risks, are also proposed.

Economic history. --- Economic conditions --- History, Economic --- Economics --- Exports and Imports --- Macroeconomics --- Empirical Studies of Trade --- Economic Integration --- Macroeconomic Analyses of Economic Development --- Measurement of Economic Growth --- Aggregate Productivity --- Cross-Country Output Convergence --- Economywide Country Studies: Africa --- Externalities --- Trade: General --- Trade Policy --- International Trade Organizations --- International economics --- Spillovers --- Exports --- Regional trade --- Imports --- Direction of trade --- Financial sector policy and analysis --- International trade --- International finance --- Balance of trade --- South Africa

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This paper examines the growth performance of sub-Saharan African countries since 1960 through the lens of growth turning points (accelerations and decelerations) and periods of sustained growth (growth spells). Growth accelerations are generally associated with improved external conditions, increased investment and trade openness, declines in inflation, better fiscal balances, and improvements in the institutional environment. Transitioning from growth accelerations to growth spells often requires additional efforts beyond what is needed to trigger an acceleration. Growth spells are sustained by fiscal policy that prevents excessive public debt accumulation, monetary policy geared toward low inflation, outward-oriented trade policies, and structural policies that reduce market distortions, as well as supportive external environment and improvements in democratic institutions. Overall, determinants of growth spells in sub-Saharan Africa are different from those in the rest of the emerging and developing countries.

Foreign Exchange --- Inflation --- Macroeconomics --- Public Finance --- Macroeconomic Analyses of Economic Development --- Measurement of Economic Growth --- Aggregate Productivity --- Cross-Country Output Convergence --- Duration Analysis --- Economywide Country Studies: Africa --- Debt --- Debt Management --- Sovereign Debt --- Energy: Demand and Supply --- Prices --- Price Level --- Deflation --- Currency --- Foreign exchange --- Public finance & taxation --- Real exchange rates --- Exchange rate arrangements --- Public debt --- Oil prices --- Debts, Public --- United States

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After close to two decades of strong economic activity, overall growth in sub-Saharan Africa decelerated markedly in 2015–16 as the largest economies experienced negative or flat growth. Regional growth started recovering in 2017, but the question remains of how trends in the economies stuck in low gear will spill over to the countries that have maintained robust growth. This note illuminates the discussion by identifying growth spillover channels. The focus is on trade, banking, financial, remittance, investment, fiscal, and security channels, which are the most prominent and most likely to transmit growth trends across borders. In addition to bringing together findings from a broad array of existing research, the note identifies countries that are the most likely sources of regional spillovers and those that are most likely to be impacted, and provides estimates for the size of these channels. It finds that intraregional trade and remittance flows are an important channel for growth spillovers, while banking channels are less important but will remain a risk going forward. Finally, the note documents other important spillover channels through financial markets contagion, revenue-sharing arrangements in fiscal unions, commodity-pricing policies, corporate investment, and forced migration. The main takeaway is that the level of interdependence among sub-Saharan countries is higher than is generally assumed. Consequently, there is a need for additional emphasis on regional surveillance and spillover analysis, along with traditional bilateral surveillance.

Africa, Sub-Saharan --- Fiscal policy --- Financial institutions --- Economic integration. --- Africa, Sub-Saharan. --- Economic conditions. --- Financial intermediaries --- Lending institutions --- Associations, institutions, etc. --- Tax policy --- Taxation --- Economic policy --- Finance, Public --- Government policy --- Balance of payments --- Banking --- Banks and Banking --- Banks and banking --- Banks --- Depository Institutions --- Emerging and frontier financial markets --- Exports and Imports --- Exports --- Externalities --- Finance --- Finance: General --- Financial markets --- Financial sector policy and analysis --- Financial services industry --- General Financial Markets: General (includes Measurement and Data) --- International economics --- International finance --- International Trade Organizations --- International trade --- Macroeconomics --- Micro Finance Institutions --- Mortgages --- Regional trade --- Remittances --- Spillovers --- Trade Policy --- Trade: General --- South Africa