Of course the relatively large and growing income gap between the two regions reflects differing rates of economic growth which may account for an important part of the divergence. While GCC states enjoyed long episodes of robust and sustained economic growth, resource-rich countries in SSA with a few exceptions suffered anemic and large growth volatility [Easterly and Levine (1997)]. According to Artadi and Sala-i-Martin (2003), economic growth rates for the SSA region as a whole became negative starting in the late 1970s into the first half of the 1990s when a dramatic drop in the magnitude of minus 1.5% was recorded. In contrast, GCC countries rapidly recovered from the 1980s downturn to achieve strong economic growth rates in the following years. Since 1990s, they have enjoyed average growth rates in excess of 6% per year [Sturm et al. (2008)].

Further evidence of absolute divergence is illustrated by a sustained deterioration of current account balances of countries in SSA. This deterioration contrasts the structurally positive balance enjoyed by GCC countries. Following economic downturns in the mid-1970s, the current account balance of SSA countries entered a long and protracted phase of sustained deterioration, and has persisted since then. In spite of the slight improvement at the turn of the millennium, most notably as a result of access to debt relief under the HIPC initiative and booms in commodity prices in the face of sustained global demands, SSA countries continue to exhibit one of the worst current account balances, even by global standards.

Their current account balance is only comparable to that of the US whom size of the current account deficit has become the major sources of global macroeconomic imbalances [Holman (2001), Cooper (2008)].<sup>16</sup> In percentage of GDP, the whole SSA region recorded a current account deficit of approximately minus 8.2% in 1995, largely above the Mann’s sustainability threshold.<sup>17</sup> Interestingly, the average across SSA resource-rich sub-sample is even larger—about minus 9%, notwithstanding their more diversified natural resource and export base. Although still negative, countries in the resource-rich sub-sample saw a slight improvement of their current account balances at the turn of the millennium, largely owing to exceptional booms in commodity prices and debt relief under the Enhanced HIPC initiative.

**Table 1: Current Account Balance of Major Trading Partners (in % of GDP)**

|**Country or Region**|**1980**|**1985**|**1990**|**1995**|**2000**|**2007**|
|---|---|---|---|---|---|---|
|**USA**|0.08|-2.80|-1.36|-1.54|-4.25|-5.34|
|**China**|0.09|-3.77|3.09|0.22|1.71|11.10|
|**GCC**|**42.43**|**16.00**|**6.81**|**-2.99**|**18.87**|**26.71**|
|**SSA-All**|**-10.84**|**-5.56**|**-5.73**|**-8.19**|**-4.87**|**-5.84**|
|**SSA Resource-**<br>**Rich**|**-6.62**|**-1.70**|**-3.85**|**-9.07**|**-2.08**|**-2.12**|

Source: World Bank World Development Indicators.

> 16 Of course, in absolute terms, the Sub-Saharan Africa’s current account deficit pales in comparison to the US one. In 2006, the US current account deficit accounted for over 70 percent of the world total when the current account of all countries running deficits is aggregated [Cooper (2008)].

> 17 According to Mann (1999), a current account deficit greater than 4.2 percent of GDP is unsustainable.

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