- Structural reforms required for 20% output lift
- 50 years for SSA’s per capita income to double
Reforms across sub-Saharan Africa economies, including Nigeria’s, should be private investment, productivity and jobs driven in order to achieve meaningful success, economists at the International Monetary Fund (IMF) have suggested in a contribution to the Fund’s most recent Regional Economic Outlook for Sub-Saharan Africa.
“The point is not reform for reform’s sake. It is to shift the growth model from one led mainly by the state to one driven more by private investment, productivity, and jobs,” they wrote.
According to them, the current growth rate for SSA means that it would take 50 years for the region to double per capita income but that “implementing well-designed structural reforms — especially in governance, business regulation, and market openness — could lift output by around 20 percent within a decade.”
The economists are of the view that sub-Saharan Africa’s growth remains too weak to deliver income convergence, and they say this is a reflection of persistently low productivity and challenges to a pivot towards private sector–led growth.
“Past growth spurts—often driven by commodity booms or public investment—have proved transitory, leaving the state as the dominant growth engine amid rising debt, high borrowing costs, and declining aid,” they wrote, stressing that “this model is no longer viable.”
Reform’s payoff is large, they said, adding that IMF staff analysis shows that closing half the gap with emerging markets in key “foundational” areas like governance, business regulation, and the external sector, could bring about progress in regional output over a 5-10 years time frame, through higher investment, stronger productivity, and greater labour force participation, under a macroeconomic stable environment.
For instance, they write that governance reforms deliver durable dividends by leveling the playing field, boosting tax compliance, and strengthening state capacity.
But they noted that the success of any reform exercise hinges as much on how reforms are designed and implemented as on which reforms are chosen.
“Sequencing foundational reforms first, bundling complementary measures, addressing distributional impacts, and adapting ambition to institutional capacity are critical,” they advised.
The IMF economists also pointed to the positives derivable from reforming state-owned enterprises, especially those in infrastructure, noting that such reform is central to lowering costs, crowding in private investment, and containing fiscal risks.
Advising countries such as Nigeria where the government says it has been on the road to reform since the President Bola Tinubu came to office in 2023, the three economists said they should tailor reform strategies to their circumstances: “comprehensive, bundled reforms where capacity is strong; foundational governance reforms and early wins where it is weak; and stronger transparency and revenue management in resource-rich economies.”
Across the sub-Saharan Africa region, they say there are signs that macroeconomic stabilisation is advancing, noting that the conditions are therefore in place for a renewed reform push.
“Anchored in a credible social contract and supported by clear communication and broad ownership, cost-effective supply-side reforms can unlock private sector–led, job-rich growth and help the region harness its demographic dividend,” they further stressed.
They said a growth reset is urgently needed by SSA because whereas there has been strong performance in a handful of countries such as Benin, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda, growth across the region has been too weak to deliver meaningful income convergence.
For instance, they pointed out that over the past three years, real GDP per capita grew by about 1.4 percent a year, compared with about 3.4 percent in emerging markets and developing economies overall.
More specifically, they said these past growth spurts faded fast, and failed to trigger the sustained private investment needed to keep growth going, with labour productivity nearly flat for three decades.
Stressing that the old model of public sector-led growth is now spent, they noted that “with debt high, borrowing costly, and aid falling, the state can no longer be the main engine of growth,” adding that the region needs more private investment, backed by broad, business-friendly reforms.
For policymakers, the IMF economists pointed to key areas of focus, stating that sub-Saharan Africa lags other developing regions most in three areas: governance, business regulation, and market openness.
“These gaps are largest in fragile and conflict-affected states and oil exporters. But they are not immutable. Rwanda and Benin, for instance, have cut red tape and used digital tools to make it easier to do business,” they wrote.
Reforming state-owned enterprises, especially in energy and transport, is another key priority, they stated, adding that when tariffs stay below cost-recovery levels, cash flow weakens, maintenance is delayed, and investment stalls.
“The result is a familiar tax on growth: unreliable and expensive services for firms and households. The better reform efforts use four ingredients: map stakeholders, align prices with costs, define social goals clearly, and explain how any savings will be used,” they advised.
In order for reform to stick, the IMF economists said choosing and designing reforms is only half the job, implementing them is usually harder. “This is because benefits often arrive slowly, sometimes beyond an electoral cycle, while vested interests resist change. Political feasibility matters as much as technical design.
The offered five guiding principles to help reforms stick:
- Start with the basics. Macroeconomic stability and predictable institutions come first. Quick, visible wins—such as online business registration—can build momentum.
- Build support early. Durable reform needs genuine consultation, cross-party backing, and candid communication on benefits, trade-offs, and timing. Political openings matter, but crises can also create them—as seen in Ethiopia, Ghana, and Zambia. South Africa’s Operation Vulindlela shows how structured engagement can sustain momentum.
- Bundle reforms. Measures often reinforce one another. Pairing reform of state-owned enterprises with pro-competition regulation, for example, can attract private participation rather than entrench monopolies. At the regional level, harmonizing rules under the African Continental Free Trade Area can expand market access.
- Protect the vulnerable. Targeted, temporary cash transfers—based on current registries and delivered digitally—can cushion short-term costs.
Strengthen the state’s implementation capacity. Better systems for learning, institutional memory, and monitoring are essential. External partners can help by supporting sustained capacity building.
