"Since we made these projections, things have turned for the worse, so they are probably on the optimistic side... No country is spared the ramifications of what is happening globally."

Analysts view sub-Saharan Africa as relatively resilient from the global downturn as growth is largely founded on internal factors and banks, with the exception of South Africa, do not have the same levels of foreign exposure as elsewhere.

Nevertheless, volatile commodity prices, and an inevitable slowing of tourism, remittances, aid and foreign investment is likely to have a negative impact, they say.

"In an increasingly adverse global environment, sub-Saharan African growth is expected to slow to about 6 percent in 2008 and 2009, down from 6.5 percent in 2007," the IMF report said.

It forecast inflation rising five points to 12 percent in 2008, then dipping to 10 percent in 2009.

"If there is one thing that hurts the poor most, it is increases in the rate of inflation," Christensen told reporters at the launch of the report in Nairobi.

"UNIQUE" INVESTMENT OPPORTUNITIES

The IMF said African nations' foreign exchange reserves have held up "fairly well so far" but would be unlikely to survive the long-term impact of the food and fuel price "shock".

The global crisis may take the edge off impressive growth rates in Africa since the mid-1990s that have helped tempt foreign investors and players to view the continent as an attractive "last frontier" in emerging markets.

But the IMF did not see a big falling off of interest.

"While the turbulence has reduced global growth and demand for sub-Saharan Africa's exports somewhat, interest in investing in the continent appears to continue, in part because rates of return there are high relative to those in mature markets and because sub-Saharan Africa offers unique diversification opportunities," its report said.

Oil exporters' economic growth was expected to fall by half a point to an average 8 percent in 2008, the IMF said, due to lower-than-expected output in the Niger Delta and Equatorial Guinea, plus weaker non-oil growth in Chad due to insecurity.

In oil importers, growth was seen decelerating also by half a point to an average 5 percent.

Foreign direct investment was holding up, the IMF said, notably in Congo and Madagascar's mining sectors, Kenya's telecommunications, and Senegal's tourism and infrastructure sectors.

Oil exporters' fiscal surpluses, excluding grants, were projected to rise to 7 percent of GDP in 2008, "reflecting a substantial oil revenue windfall." They will drop to 5 percent in 2009, "reflecting lower oil prices", the IMF said.

Oil importers' fiscal balances, also excluding grants, would deteriorate to 3.0 percent of GDP in 2008 "because of lower GDP growth and the cost of policy measures to cushion the impact of the food and fuel price shock", the IMF said.

They would stay at 3 percent in 2009. Reuters

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