Marco Pani

Mr. Mauro Mecagni

Mr. Juan S Corrales

Mr. Jemma Dridi

Mr. Rodrigo Garcia-Verdu

Patrick A. Imam

Mr. Justin Matz

Ms. Carla Macario

Mr. Rodolfo Maino

Mr. Yibin Mu

Ashwin Moheeput

Mr. Machiko Narita

Mr. Manuel Rosales

Mr. Sebastian Weber

Mr. Etienne B. Yehoue

Dollarization—the use of foreign currencies as a medium of exchange, store of value, or unit of account—is a notable feature of financial development under macroeconomically fragile conditions. It has emerged as a key factor explaining vulnerabilities and currency crises, which have long been observed in Latin America, parts of Asia, and Eastern Europe. Dollarization is also present, prominently, in sub-Saharan Africa (SSA) where it remains significant and persistent at over 30 percent rates for both bank loans and deposits—although it has not increased significantly since 2001. However, progress in reducing dollarization has lagged behind other regions and, in this regard, it is legitimate to ask whether this phenomenon is an important concern in SSA. This study fills a gap in the literature by analyzing these issues with specific reference to the SSA region on the basis of the evidence for the past decade.

Experiences and Lessons

Dollarization in Sub-Saharan Africa

Corinne Deléchat

Rui Xu

Mr. E. Gelbard

Ms. Ejona Fuli

Mr. Mumtaz Hussain

Mr. Ulrich Jacoby

Mrs. Dafina Mulaj

Gustavo Ramirez

This paper analyzes the persistence of fragility in some sub-Saharan African states and the multiple dimensions of state weakness that are simultaneously at play. This study also provides an overview of the analytics of fragility, conflict, and international engagement with fragile states before turning to an assessment of the current state of affairs and the areas in which there has been progress in building resilience. The paper also looks at the role of fiscal policies and institutions and analyzes growth accelerations and decelerations. Seven country case studies help identify more concretely some key factors at play, and the diversity of paths followed, with an emphasis on the sequencing of reforms. The paper concludes with a summary of the main findings and policy implications.

Building Resilience in Sub-Saharan Africa's Fragile States

Marco Pani

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