2010

Economic Development In Africa: Salient Trends and Priorities

Economic growth of African countries accelerated since the 2000s, and caught up with that of other developing regions. Rising prices of commodities, particularly minerals and metals as well as fuels, which comprise a large part of Africa’s exports, had an important influence on this positive picture. However, as growth fades in China which was instrumental in stimulating demand and pushing up the commodity prices, Africa’s economy will be negatively affected. A majority of Africa’s international trade is with developing countries. African countries must reduce dependence on commodities and search for alternative development paths. This is a return to the pre-2000s, when commodity prices were considerably lower. Diversification, improving productivity and the quality of African products, as well as more effective participation in global value chains appear as the policy objectives to follow. Given the low levels of income, foreign direct investment can be instrumental in African development. Foreign direct investment has been mostly flowing into natural resources but intraIn spite of the potential instructive value of individual success stories and stories of failure, this paper refrains from providing specific country examples. They can be found in some of the references provided below. The focus is on a few interrelated meso-level issues, which need to be tackled with priority from the point of view of attaining sustained and sustainable development for a significant number of African, and particularly SSA, countries. These reflect global and regional realities African investment favours manufactures and services. These sectors are closely related to the demands of the rising middle class. The allocation of natural resource rents to productive investments is also important. Better governance would help in this respect as well as in stimulating foreign direct investment. Education is an important component of all development policies

Keywords:

Africa, economic development, commodities, natural resources, diversification, foreign direct investment global value chains,

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