Growth slowed to 3.7 per cent in 2008 (from 4.8 per cent in 2007) mainly due to more expensive imports, the global recession and the government’s increasing budget problems, which led to further worrying delays in payments to private contractors. Major investment programmes, including a campaign to grow more food (Grande offensive agricole pour la nourriture et l’abondance – Goana), as well as upgrading roads and ports, should sustain growth over the next few years. But real GDP growth in 2009 is forecast at only 3.5 per cent because of the worldwide recession, with sharply lower world demand reducing exports by emerging and developing countries. Growth may rise slightly to 3.6 per cent in 2010.
As in 2007, growth in 2008 was dominated by strong construction and service sectors, especially telecommunications. The defining feature of the government’s economic policy in 2007 and even more in 2008 was the change in course in public finance management. From a policy of generously subsidising stable food products, more prudent management was undertaken marked by ending most subsidies and reforming the state-run electricity company’s rates system to help get it back on its feet. But these steps did not reduce the government’s arrears or strengthen its finances and social unrest erupted that could undermine political stability in 2009. The government’s main task will be to continue reorganising public finances and fight inflation while preserving social peace.