Toward the Economic Transformation of Africa

Abstract

Despite the severity of the global financial and economic crisis of 2007, Africa did not deep into a recession but rather saw its economies significantly slowdown. A question one may ask is how did Africa withstand the 2007 crisis. Although no definitive answer can be offered, one could suggest that the positive performance of Africa is due to the solid policies run by many African countries prior to the crisis. Experiences from other parts of the world indicate that if African countries continue their current economic performance then the rapid growth recorded prior to the financial crisis would result in substantial structural changes within the economies of many countries. The goal of many African countries, as enshrined in their development plans or strategies, is to reach middle-income-country status by the next decade. However, moving from low- to middle-income status would not only require an increase in per capita income but also structural transformation of the economies as an important part of development. The success of Asian and Latin American countries to embark on structural transformation of their economies to significantly uplift living standards of the poor raises several important questions for Africa. Firstly, can Africa draw lessons from these countries? Secondly, what are the roles private and public sectors as well as agriculture sector should play in initializing and sustaining a transformation? Thirdly, what is the impact of initial policies during the early stages of transformation on a country’s long-term development path? The purpose of this paper is an attempt to answer the questions raised as well as offer policy prescriptions. Going forward it is within the grasp of Africa to transform itself into a middle-income continent within a generation. This will require a development agenda whose implementation is inclusive and it is aimed at uplifting majority of the citizenry from poverty as well as growing the middle class. Africa may consider using deeper forms of regional integration to boost intra-African trade as well as find innovative financing mechanisms support regional infrastructure. In concluding, it is very important for all Africans to note that Africa has to be developed by Africans. “Hand outs” glorified as aid/grants, alone will not change the lives of the many poor citizens of the continent. Ultimately, Africans are totally responsible for the development of the continent and therefore should shoulder the burden of financing its development, no matter how long it takes and how painful it may be.