The International Monetary Fund (IMF) has projected that the Gross Domestic Product (GDP) growth in Nigeria and other sub-Saharan African countries will grow by about 6.5 per cent in 2007, following improved oil production in a number of countries in the region.

But contrary to former poor performance of oil producing nations, IMF said in a release, made available yesterday in Lagos, that oil-importing countries growth would remain steady at about 5 per cent.
Inflation for the region, according to the financial institution, is projected to remain unchanged at about seven per cent with three-quarters of the countries expected to record single-digit inflation.
IMF in its regional economic outlook for sub-Saharan Africa, said that for the third consecutive year, economic growth in the area remained strong at 5.4 per cent in 2006, slightly lower than the 6 per cent recorded in 2005.

The organisation said that because of constraints faced in expanding oil production, growth in oil exporting countries declined to 5.6 per cent in 2006 from 7.9 per cent in 2005.
By comparison, growth in oil-importing countries at 5.3 per cent was almost unchanged from 2005: nearly half of them recorded growth of 5 per cent or more, supported by strong demand for non fuel commodity exports, a good agricultural season, and rising investment.

IMF attributed the higher growth trend in sub-Saharan Africa to both positive external developments, such as foreign demand and high commodity prices, and strong domestic investment and productivity gains.
Identifying sound economic policies by most countries as a major indicator, IMF said that much more needs to be done to achieve the Millennium Development Goals (MDGs).

It said that increased aid flows were necessary for greater progress in meeting the MDGs.
According to the global financial institution, the brighter prospects of oil-producing countries in sub-Saharan Africa stems largely from the windfall profits in recent years compared with previous commodity price booms, they have saved a significant part of their additional revenue.
The challenge for public policy and policymakers is to create the necessary space for higher and effective public spending.

It said that recent commodity boom and rapid growth in Asia has improved sub-Saharan Africa's export prospects, providing an opportunity to reverse the long-term decline in the region's share in world trade.
Commercial exchanges with Asia, particularly China, have expanded dramatically, although European Union countries and the U.S. still account for two and half times the export shares of Asia.

It noted that recent improved macroeconomic performance and debt relief have altered many countries' medium term debt outlook. As a result, domestic debt markets have become more active and in a number of countries, foreign portfolio investors have shown active interest.

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