Thursday, May 9, 2019
10:00am to 12:00pm
Elliott School of International Affairs
Lindner Commons, 6th floor
1957 E Street NW
Washington, DC 20052
Welcome Remarks by Maggie Chen and Jennifer Cooke
|10:05 a.m.||Opening remarks and REO summary – Mahvash S. Qureshi|
|10:20 a.m.||“The Economic Consequences of Conflict” – Shanta Devarajan|
|10:40 a.m.||Discussant remarks and presenter response|
|10:55 a.m.||Audience Q&A|
“Is the African Continental Free Trade Area a Game Changer for the Continent?” – Jason Weiss and Yunhui Zhao
Florie Liser, President and CEO of the Corporate Council on Africa
|11:30 a.m.||Discussant remarks and presenter response – Discussant (TBD)|
|11:45 a.m.||Audience Q&A|
|12:00 p.m.||Event conclusion|
SUMMARY Chapter – Presented by Mahvash S. Qureshi - IMF
The economic recovery in sub-Saharan Africa continues. Regional growth is set to pick up from 3.0 percent in 2018 to 3.5 percent in 2019, before stabilizing at about 4.0 percent over the medium term. These region‑wide statistics mask considerable heterogeneity in the growth performance and prospects of countries across the region. About half of the countries—mostly non-resource-intensive—are expected to grow at 5 percent or more, implying that their per capita incomes over the medium term would rise faster than the average for the rest of the world. For other countries (mostly resource intensive), improvements in living standards will be slower. Notwithstanding these different economic prospects, countries share the challenge of strengthening resilience and creating higher, more inclusive and durable growth. Addressing these challenges requires enhancing resilience to shocks by building fiscal space including through revenue mobilization, boosting productivity, and spurring private investment.
The two analytical chapters in the REO focus on the economic costs of conflicts in the region and the implications of the African Continental Free Trade Agreement (AfCFTA).
THE ECONOMIC CONSEQUENCES OF CONFLICT: presented by Siddharth Kothari
This chapter explores the challenges faced by conflict-affected countries in sub-Saharan Africa, providing a comprehensive analysis of the trends and economic consequences of conflicts. Although the intensity of conflicts in recent years is lower than that observed in the 1990s, the region remains prone to conflicts, with around 30 percent of the countries affected in 2017. Moreover, the nature of conflicts has changed, with traditional civil wars being replaced by non-state-based conflicts, including the targeting of civilians through terrorist attacks. Conflicts in the region are associated with a large and persistent decline in per capita GDP and have significant spillover effects on nearby regions and countries. They also pose significant strains on countries’ public finances, lowering revenue, raising military spending, and shifting resources away from development and social spending, which further aggravates the conflicts’ economic and social costs. The findings highlight the significant costs and formidable challenges faced by countries suffering from conflict and underscores the need to prevent conflicts, including by promoting inclusive economic development, building institutional capacity, and social cohesion. For countries in conflict, efforts should focus on limiting the loss of human and physical capital by protecting social and development spending. While this may be especially daunting given fiscal pressures, well-targeted and coordinated humanitarian aid and concessional financial assistance can provide some relief.
Is The African Continental Free Trade Area A Game Changer For The Continent?
potential benefits and challenges of implementing the AfCFTA. The AfCFTA agreement envisions elimination of tariffs on most goods, liberalization of trade of key services, addressing nontariff obstacles that hamper intraregional trade, and eventually creating a continental single market with free movement of labor and capital. The AfCFTA will likely have important macroeconomic and distributional effects. It can significantly boost intra-African trade, particularly if countries tackle nontariff bottlenecks to trade, including physical infrastructure, logistical costs, and other trade facilitation hurdles. The picture is not uniform. More diversified economies and those with better logistics and infrastructure will benefit relatively more from trade integration. Fiscal revenue losses from tariff reductions are likely to be limited on average, with a few exceptions. Moreover, deeper trade integration is associated with a temporary increase in income inequality. The findings suggest that, in addition to tariff reductions, policy efforts to boost regional trade should focus on reforms to address country-specific nontariff bottlenecks. To ensure that the benefits of regional trade integration are shared by all, policymakers should be mindful of the adjustment costs that integration may entail. For less developed and agriculture-based economies, trade policies should be combined with structural reforms to improve agricultural productivity and competitiveness. Furthermore, governments should facilitate the reallocation of labor and capital across sectors (for example, active-labor market programs such as training and job-search assistance, and measures that enhance competitiveness and productivity) and bolster safety nets (income support and social insurance programs) to alleviate the temporary adverse effects on the most vulnerable.