Fixed exchange rate countries in sub-Saharan Africa grow 1-2 points slower
Evidence
IMF data seems to suggest that a fixed exchange rate is not necessarily a good option for African countries: since 2000, sub-Saharan African countries operating in a fixed exchange rate regime have experienced an economic growth 1 to 2 percentage points lower than countries with a flexible exchange rate. This gap is due in particular to the ‘weaker growth among the CFA France zone countries’, states the IMF. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 296
Categorization
- QUESTION: Worth checking: does the IMF growth differential control for other structural differences like commodity dependence between the two regime groups?
- XREF: connects to: Fixed exchange rates force austerity when competitiveness declines; ECOWAS convergence criteria are unrealistic for volatile African economies; Franc zone growth falls below the sub-Saharan average. (+2 more)
Related
- ECOWAS convergence criteria are unrealistic for volatile African economies (similarity 0.85)
- Franc zone growth falls below the sub-Saharan average. (similarity 0.83)
- Fixed exchange rates force austerity when competitiveness declines (similarity 0.82)
- Fixed exchange rates trade employment stability for external balance (similarity 0.81)
- Fixed and floating exchange rates operate by opposite logics (similarity 0.80)
- France’s strong-franc policy worsened CFA countries’ competitiveness (similarity 0.79)
- Franc zone growth is uneven and often strongly negative (similarity 0.79)
- CFA critics demand flexible exchange rates, development-oriented central banks, and banking reform (similarity 0.79)
- African economists warned that fixed euro pegging would exclude African economies from global competition (similarity 0.78)
- Pursuing maastricht-style convergence criteria cut West African GDP growth and repeatedly delayed currency plans (similarity 0.78)