Author(s): Olivier de Boysson and Clément Gillet
Date published: Jan 2019
SUERF Policy Note, Issue No 51
By Olivier de Boysson and Clément Gillet, Société Générale
JEL-codes: F21, F30, O11, O55, Q18.
Keywords: Africa, Investment, Growth, Productivity, Debt.
The past two decades have been marked by renewed optimism for Africa with several countries in the region enjoying high growth rates. Ranking high amongst the many positive factors (rapid urbanization, a growing middle class, etc.), is Africa’s increasing trade and financial integration with the rest of the world. All types of funding (foreign investment, bank financing, etc.) have risen rapidly since the mid-2000’s. However, the economic performance in terms of productivity catch-up with more developed markets has yet to materialise, and the continent still falls well short of its full growth potential. To reach this, a higher investment rate and more diversified FDI across sectors are key in shaping a more balanced and resilient growth model, less focused on just a few pockets of growth (such as extractive industries and trade hubs). This new pattern should prioritize agriculture, further diversification of export revenues and more inclusive finance to gradually attract a larger share of the rural activity into the formal sector.
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