# _Sub-Saharan Africa by resource abundance_

Our analysis of the evolution of fiscal sustainability indicators focuses on three different groups of countries in the region according to their extent of resource abundance: non-resource rich countries, non-oil-resource rich countries, and oil rich countries (see Table 1).<sup>8</sup> _Non-resource rich countries_ show a slight deterioration of the primary balance —their deficit widens from an average 1.8 percent of GDP in 2010-13 to 2.2 percent of GDP in 2015-16— although this change over time is not statistically significant. The overall government balance also worsened; that is, the deficit increased from 3.2 percent of GDP in 2010-13 to 3.7 percent of GDP in 2015-16 —and this widening of the overall deficit is statistically significant at the 10 percent level under a one-tailed alternative hypothesis. Public debt stocks (as percentage of GDP) increased from 42 percent of GDP in 2010-13 to about 50 percent of GDP in 2015-16 (i.e. an accumulation of debt that is statistically significant). Fiscal space narrowed for this group of countries —as the time that takes to fully repay their debt increased from 3 years of taxes in 201013 to 3.6 years in 2015-16.

_Non-oil-resource rich countries_ (that is, countries with abundant mineral ores and metals) posted primary and overall fiscal deficits in 2015-16 that are significantly larger than those in 2010-13; partly, due to the sharp decline of metals and minerals —including iron ore, copper, among others. For instance, the primary deficit widened from 1.7 percent of GDP in 2010-13 to 5.4 percent of GDP in 2015-16. Moreover, the general government gross debt (as percentage of GDP) rose sharply from 27 percent of GDP in 2010-13 to 44 percent of GDP in 2015-16. Finally, the number of tax-years to fully repay the public debt burden increased by more than one year; that is, from 2.5 years in 2010-13 to 3.8 years in 2015-16.

The primary balance of _oil rich countries_ shifted from a surplus of 1.1 percent of GDP in 2010-13 to a deficit of 3 percent of GDP in 2015-16. An analogous movement is observed in the overall balance (which went from a surplus of 0.2 percent of GDP in 2010-13 to a deficit of 4.5 percent of GDP in 2015-16). The sharp deterioration of the primary and overall balances might be attributed to the large drop in government revenues (specifically, oil-based government revenues) amid an environment where government expenditure was still trying to support aggregate demand. In this context, general government gross debt of oil rich countries more than doubled: it rose from 21 percent of GDP in 2010-13 to 47 percent of GDP in 2015-16. Finally, we should note that it took 1.3 tax-years for these countries to fully repay their debt in 2010-13. That number considerably increased to 2.5 tax years in 2015-16.

> 8 This paper defines resource-rich countries as those nations with natural resource rents (excluding forests) that exceed 10 percent of GDP over the last decade. That is, the sum of oil rents, natural gas rents, coal rents (hard and soft), and mineral rents should exceed 10 percent of GDP. Estimates of natural resource rents are based on World Bank (2011).

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