Download Growth Strategies for Africa in a Changing Global Environment

Growth Strategies for
Africa in a Changing
Global Environment
Shahid Yusuf
Growth Dialogue
Washington DC
This Time it is different
 Africa has growth momentum sustained for a decade.
 Many countries have achieved macroeconomic stability.
 Demand for mineral wealth is strong and likely to remain so.
 Chinese and other FDI helping to promote mineral sector and
infrastructure development.
 South –south trade on upward trend.
 Advantages of a ‘late starter’ and technological catching-up
buoyed by prospect of “second unbundling” and transfer of
industry from East Asia.
But some past trends persist and there
are new challenges
 Gross savings have declined, investment shows only modest increase.
 Industrial share of GDP declining. Large urban centers are “consumer
cities”.
 Little progress with industrial and export diversification. “Resource
curse” a threat to mineral exporters.
 Agricultural yields low because fertilizer application is minimal, there is
too little R&D and rural infrastructure underdeveloped.
 Populations on the rise and migration to cities leading to sprawl and
shanty towns.
 Climate change looms ahead threatening desertification, water
scarcity, extreme weather events, and coastal inundation.
Growth Prospects can be improved by
promoting Global Public Goods
 Strengthening institutions that underpin globalization esp.
international and regional trade and FDI.
 Reinforcing institutions vital to political stability.
 Engaging with other nations and taking concrete steps to
contain global warming.
Enhancing National and Regional Growth
Drivers
 Efficient natural resources exploitation and management of revenues.
 Raising agricultural productivity.
 Enlarging youth dividend by improving human capital quality and skill mix.
 Stimulating export-oriented industrialization via FDI and participation in GVCs.
 Narrowing technology gaps through market competition and incentives for
technology absorption.
 Increasing urban agglomeration economies by creating skilled/producer cities.
 Leveraging demand from growing middle class to grow local firms and seed
local innovation.
By adopting a strategic approach that
augments and harnesses
 Democratic institutions for better governance .
 Organizational capacity of state to guide, coordinate and
implement developmental activities , including industrial and
export diversification.
 Financial institutions to mobilize/allocate resources and grow local
firms, build logistics capabilities.
 Learning and innovation system to support diversification and long
run productivity growth.
 Aid and FDI to supplement domestic resources, accelerate
technology transfer and facilitate entry into GVCs.
Thank You