More Sand Than Oil

• Author: Nelson Sobrinho - Vimal Thakoor
• Position: NELSON SOBRINHO and VIMAL THAKOOR are economists in the IMF's African Department. This article is based on IMF Working Paper 19/1,which the authors produced jointly with Amine Hammadi,Marshall Mills,and Ricardo Velloso.
• Pages: 35-37

A

new wave of leaders in sub-Saha ran

Africa has expressed renewed com-

mitment to ghting corruption. is

trend reects a recognition that go od

governance is key to fostering grow th and economic

development. e link between growt h and gov-

ernance is especia lly strong on this resource-rich

continent, where people stand to gain more eco-

nomically from reduci ng corruption than any where

else in the world.

Our research shows th at the governance dividend

for countries in sub-Sah aran Africa is t wo to three

times larger th an for the average country in the rest

of the world—even in regions perceived to have

equally weak governa nce. Bringing sub-Sa haran

Africa’s governance to the world average could

increase GDP per capita by an estim ated 1 to 2

percentage points a year.

Low corruption and good governance a re not the

sole drivers of growth, of course. Some countries

perceived as having wea k governance have expe-

rienced episodes of strong growth d riven by other

factors—for exa mple, natural resource wealth. In

other cases, countrie s with good governance have

not necessarily enjoyed strong growt h. But we

nd that corruption tends to undermine economic

growth, behaving more like sand than oil in the

economic engine.

MORE SAND

THAN OIL

Sub-Saharan Africa stands to gain more from reducing corruption

than any other region

Nelson Sobrinho and Vimal Thakoor

September 2019 | FINANCE & DEVELOPMENT 35

ART: ISTOC K/ FIL O; STARC EVIC