GROWTH STRATEGIES FOR AFRICA IN A CHANGING GLOBAL ENVIRONMENT: Policy observations for sustainable and shared growth

Following decolonization, growth accelerated in the leading African economies with the emergence of industrial activity, the modernization of physical infrastructure, and the quickening of urbanization. However, by the mid-1970s this initial phase of catching up had run out of steam, and African countries entered a long economic twilight that extended through the mid-1990s. Since then, and for over a decade, Africa, has benefitted from a widely shared revival of economic activity. Some reasons for this revival are shared worldwide, including globalization, innovations triggered by the advent of the Internet and advances in semiconductor/digital technologies, expansionary monetary policies, and by the growth of Asian countries that accelerated industrialization and trade volume. Other causes are internal to Africa, such as greater stability, better-managed macroeconomic policy, more open economies, and improved human development indicators. But this new-found momentum cannot be taken for granted. In particular, the financial crisis of 2008–09 has weakened Africa’s principal Western trading partners. Export-led growth is no longer the recipe for all seasons. This paper sketches a strategy for African late starters that identifies the key objectives and policy initiatives appropriate for a post-financial-crisis environment where South-South trade and capital flows are taking on a greater salience.