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The impact of low oil prices in Sub-Saharan Africa

Gerard Kambou's picture
Growth picked up in Sub-Saharan Africa in 2014, after moderating in 2013, but remained weaker than during the pre-crisis years. It softened around the turn of the year owing to headwinds from the plunge in the price of oil. Sub-Saharan Africa’s oil exporters, which account for nearly half of the region’s aggregate output, have been hit hard by the sharp decline in the price of oil. From June 2014 to January 2015, oil prices fell by nearly 50 percent, and have remained low despite the recent uptick.        
 

Can a picture from space help to measure poverty in a Guatemalan village?

Andrea Coppola's picture

John Grunsfeld, former NASA Chief Scientist and veteran of five Space Shuttle flights, had several chances to look down at Earth, and noticed how poverty can be recognized from far away. Unlike richer countries, typically lined in green, poorer countries with less access to water are a shocking brown color. During the night, wealthier countries light up the sky whereas nations with less widespread electricity look dim.
 
Dr. Grunsfeld’s observation might have important implications. Pictures from satellites could become a tool to help identifying where poverty is, by zooming in to the tiniest villages and allowing a constant monitoring that cannot be achieved with traditional surveys.

The shadow over commodity exporting low-income countries (LICs)

Tehmina S. Khan's picture

Low-income countries facing a hangover as the commodity cycle turns

Until recently, confidence and expectations for low income countries (LICs) were soaring – with good reason. After all, for most of the 2000s, many LICs managed to consistently post growth rates that were much higher than in the previous three decades (Figure 1).

For metal and mineral exporting LICs – these account for almost two-thirds of LICs[1] – robust global demand for copper, iron ore, oil and high commodity prices filled government coffers and lifted investment and exports. This resulted in a broad based improvement in growth (Figure 2).  The 2000s also marked a decade of discoveries, with major oil and gas discoveries in East and West Africa that transformed long term prospects for some LICs.

Despite low commodity prices, growth prospects in low-income countries remain robust

Gerard Kambou's picture
Large agricultural sectors, remittances, and public investment have cushioned the impact of sharply weaker terms of trade in commodity-exporting low-income countries (LICs). Growth in LICs was flat in 2014, but is expected to pick up in 2015 and remain robust during 2016–17.  Declining commodity prices, however, are likely to increasingly put pressure on fiscal and current account balances of LICs that rely heavily on exports of energy and metals. Many commodity-exporting LICs have limited buffers to absorb this deterioration.

What drives local food prices? Is it world prices? Weather? Seasonality? Policies? Fuel prices? Other costs?

John Baffes's picture
The question has been asked often in the context of the post-2005 commodity price boom. In a recently published working paper, What drives local food prices? Evidence from the Tanzanian maize market, we examine the factors driving movements of prices in 18 major regional maize markets in Tanzania.

Promoting gender equality—lessons from India

Ejaz Ghani's picture
A central driver of economic growth is the increased role of women. This comes in many forms: increased female labor force participation, reduced discrimination and wage differentials that encourage greater effort, and improved advancement practices that promote talented women into leadership and managerial roles. Indeed, empowering half of the potential workforce will have significant economic benefits that goes beyond promoting just gender equality. 
 

When China met Africa

Tehmina S. Khan's picture
China’s expanding presence in Sub-Saharan Africa has been a major catalyst for growth in the region. Contrary to widespread opinion, its engagement covers all aspects of development. Stronger domestic policies will help countries in the region increase the gains from this growing partnership.

What do we know (and what not) about safety nets in urban areas?

Ugo Gentilini's picture
Cities are magnets of opportunity: they offer better standards of living than rural areas, and will soon house 75% of the global economy. But when demand for housing, jobs, and services outstrips capacity, urban areas can turn into congested, haphazard locales that amplify extreme poverty.

On booms and super-cycles: China and India's central role in global commodity markets

John Baffes's picture
Global commodity prices underwent an exceptionally strong and sustained boom beginning in 2000. Unlike a typical price cycle, this boom has been characterized as a “super cycle”, i.e., a demand-driven surge in commodity prices lasting possibly decades rather than years. Many researchers say this is the fourth “super cycle” of the past 150 years. The price super cycle has been attributed to strong growth in emerging markets.

Equality of opportunity as an engine of prosperity

Augusto Lopez-Claros's picture

We have learned much over the past several decades about the connection between gender inequality and economic growth, particularly when we talk about inequalities in education and employment. Inequalities in education, for instance, artificially reduce the pool of talent which societies can draw from; by excluding qualified girls from the educational stream and promoting less qualified boys, the average amount of human capital in a country will be reduced and this will have an adverse impact on economic performance. We also know that the promotion of female education leads to lower births per women, not only because educated women will have greater knowledge about family planning but also because education creates greater opportunities for women that may be more attractive than childbearing.

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