Current Account Deficits in Africa: Stylized Facts and Basic Determinants

This article analyzes the behavior of current account deficits in Africa. The findings are that deficits are (i) not very persistent; (ii) positively linked with domestic growth; (iii) strongly linked with public (and private) savings, suggesting that fiscal consolidation in IMF‐supported programs may be relatively effective; (iv) linked with aid flows, so as to close the external gap; and (v) linked with currency depreciation and the terms of trade.