Africa’s frontier economies are considered to be the anchors of future growth and development on the continent, yet little is known about the characteristics of their business cycles. This hampers the ability of government to implement appropriate policies to support growth. This study identifies the stylised facts of the business cycles of Africa’s frontier economies over the period 1980 to 2017. Some of our main findings include that macroeconomic volatility in these countries is high; volatility of investment, trade and the real exchange rate relative to output exceeds that in developing countries; government and household expenditure are strongly procyclical; interest rates lead output; and the business cycles of these frontier economies are affected by activity in developed countries. Based on the findings, policy recommendations are made to support future growth in Africa’s frontier economies.

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Keywords

business cycles, stylised facts, frontier economies, Africa