Sustaining the Economic Rise of Africa
6 Pages Posted: 11 Oct 2014
Date Written: August 1, 2014
According to the White House, the upcoming U.S.-Africa Summit in Washington “will highlight America’s commitment to Africa’s security, its democratic development, and its people.” In just one day, on August 6, 2014, U.S. President Barack Obama will be meeting 50 African leaders to discuss a diverse range of topics including “inclusive, sustainable development, economic growth, and trade and investment,” “peace and security, including a discussion of long-term solutions to regional conflicts, peacekeeping challenges, and combating transnational threats,” and governance, “in order to deliver services to citizens, attract and prepare for increased domestic and foreign direct investment, manage transnational threats, and stem the flow of illicit finance.”
Without a doubt, it will be a very busy day. However, it should not blind us to the fact that the recent improvements in economic performance and in well-being in sub-Saharan Africa (hereafter Africa) have little to do with symbolic politics and photo ops in Washington. Rather, they are the result of rising commodity prices as well as domestic reforms, such as more prudent fiscal and monetary policies, privatization of state-owned enterprises, and improvements in the business environment. As a 2010 McKinsey report finds, much of Africa’s recent growth can be explained by factors such as the reduction of average inflation from 22 percent in the 1990s to 8 percent in 2000s, the reduction of Africa’s budget deficits by two-thirds, and by significant improvements in the quality of institutions.
To sustain and accelerate the current growth of African economies, African leaders need to focus on domestic structural and institutional reforms. They also need to make more tangible progress removing existing barriers to trade and investment on the continent. But African leaders should demand that the West help too, by abandoning its agricultural protectionism, including the wasteful programs of explicit and implicit support of domestic agricultural production, which hurts agricultural sectors in developing economies.
Keywords: African economic growth, trade barriers in Africa
JEL Classification: F13, F14, O21, O22, P45
Suggested Citation: Suggested Citation