Is Africa's Economy at a Turning Point?

57 Pages Posted: 17 Feb 2008

See all articles by Delfin S. Go

Delfin S. Go

Development Prospects Group, The World Bank

Jorge Arbache

University of Brasilia - Department of Economics

John Page

World Bank

Multiple version iconThere are 2 versions of this paper

Date Written: 2008

Abstract

In this paper, Arbache, Go, and Page examine the recent acceleration of growth in Africa. Unlike the past, the performance is now registered broadly across several types of countries-particularly the oil-exporting and resource-intensive countries and, in more recent years, the large- and middle-income economies, as well as coastal and low-income countries. The analysis confirms a trend break in the mid-1990s, identifying a growth acceleration that is due not only to favorable terms of trade and greater aid, but also to better policy. Indeed, the growth diagnostics show that more and more African countries have been able to avoid mistakes with better macropolicy, better governance, and fewer conflicts; as a result, the likelihood of growth decelerations has declined significantly. Nonetheless, the sustainability of that growth is fragile, because economic fundamentals, such as savings, investment, productivity, and export diversification, remain stagnant. The good news in the story is that African economies appear to have learned how to avoid the mistakes that led to the frequent growth collapses between 1975 and 1995. The bad news is that much less is known about the recipes for long-term success in development, such as developing the right institutions and the policies to raise savings and diversify exports, than about how to avoid economic bad times.

Keywords: Growth diagnostics, growth robustness, economic policy, Africa

JEL Classification: O11, O47, O55

Suggested Citation

Go, Delfin S. and Arbache, Jorge and Page, John, Is Africa's Economy at a Turning Point? (2008). World Bank Policy Research Working Paper No. 4519. Available at SSRN: https://ssrn.com/abstract=1094314

Delfin S. Go (Contact Author)

Development Prospects Group, The World Bank ( email )

1818 H Street
Washington, DC 20433
United States

Jorge Arbache

University of Brasilia - Department of Economics ( email )

Campus Universitário Darcy Ribeiro
Asa Norte
Brasília, Distrito Federal 70910-900
Brazil
+ 55 61 8194 4529 (Phone)

John Page

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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