Important compositional effects were at work, affecting the differences of means for the subset of countries experiencing growth accelerations. Savings for all African countries undergoing growth accelerations, for instance, fell significantly, from 21 percent in 1985–94 to 13 percent in 1995–2005. Two factors were at work. Because the probability of a growth acceleration was higher during 1995–2005, the number of observations was larger (for example, 201 country-years for savings), pulling in a wider variety of country circumstances, including economies with low savings rates. In contrast, the probability of a growth acceleration was much lower for 1985–94, and the number of observations was therefore few (for example, 84 country-years for savings). However, the countries that did grow during this more difficult period had substantially better economic indicators than those experiencing normal or bad times. In addition to savings, compositional effects for all countries were also observed in aggregate investment, trade, exports, imports, and terms of trade. This factor was less important for FDI, the real exchange rate, public consumption, and public debt.

In general, there were more significant compositional effects for non-resourcerich countries than for resource-rich countries during growth accelerations. The effect was common only for savings. In non-resource-rich countries, these compositional effects were also observed for aggregate investment, private sector investment, trade, exports, and imports. One area in which the non-resource-rich countries did much better during growth accelerations was inflation: not only was the level much lower in the second period, but also the means in the two periods were significantly different.

Overall, there is therefore modest evidence of improvements in economic fundamentals, in particular for resource-rich countries. The data are, however, somewhat mixed, and the robustness of Africa’s growth remains fragile.

|**Table 13: Differences b**<br>**Variable**|**etween simple**<br>**Sub-**<br>**Saharan**<br>**Africa**|**sample average**<br>**East Asia &**<br>**Pacific**|**by regions, wei**<br>**Latin**<br>**America &**<br>**Caribbean**|**ghted data, 199**<br>**Middle East**<br>**& North**<br>**Africa**|**5-2005**<br>**South**<br>**Asia**|**All**<br>**Low &**<br>**middle**<br>**income**|
|---|---|---|---|---|---|---|
|Per capita GDP growth|1.34|6.75|1.13|2.23|4.27|3.89|
|Savings (% GDP)|17.47|38.45|21.04|23.85|22.39|26.01|
|Investments (% GDP)|17.69|32.77|19.17|22.49|22.88|23.65|
|Private sector investment (% GDP)|13.11|19.27|16.39|13.92|16.36|16.83|
|FDI net flow (% GDP)|2.60|3.22|3.24|1.16|0.79|2.73|
|Consumption (% GDP)|84.10|68.03|80.85|75.64|80.54|76.23|
|Trade (% GDP)|62.31|66.85|42.72|57.38|31.90|55.43|
|Exports (% GDP)|30.62|35.04|21.47|28.15|14.81|27.95|
|Imports (% GDP)|31.68|31.78|21.25|29.22|17.09|27.47|
|Terms of trade (2000=100)|101.89|90.89|101.50|NA|104.10|96.28|
|GDP deflator (%)|7.16|4.91|6.17|5.20|5.67|6.48|
|Governmentconsumption(% GDP)|16.00|13.47|14.52|15.04|10.83|14.34|
|Note: the sample averages refer to all years betw<br>Source: Arbache and Page(2007a)|een 1995 and 2005.||||||

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