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Inclusive Growth

AfDB: Championing inclusive growth across Africa. A blog by the former Chief Economist and Vice-President

For the past decade, Africa has had strong growth. A new economic momentum has been created. The continent weathered the financial crisis and has bounced back. But headline economic growth is not enough. Deliberate policies to reduce inequalities and promote inclusion are now needed more than ever before. It is time to focus on what people want: decent work, a living wage, access to basic service, more democracy and accountable governments.  Africa and its people aim to be a pole of growth in the decades ahead.

24 Jul 2015

Debt Distress in Africa: Be Afraid?

I.  Africa’s Growth-Debt Nexus As African countries seek today to consolidate their growth through increased foreign borrowing, the words “de ja vu” are frequently cited, with experts’ eyes on the implications for debt distress. Some thirty five years ago, the Latin American economies had enjoyed similarly high growth levels buttressed by large inflows from US private banks, at sub-prime rates. While the latter helped close the region’s current account deficits, following the oil-price shocks of the 1970s, they also escalated the debt overhang. In the first half of the 1980s, Latin...
12 May 2015

Are African statistics a tragedy?

Africa’s growth resurgence during the past decade and its persistence have taken many watchers of the continent by surprise. The international media have been busy coining labels to match this unexpected turn of fortune – “Africa rising” being the commonest and most misleading label to date. Interestingly, Africa’s recent high growth has also revived general interest in its administrative and planning processes, with national development plans and visions, all but abandoned in past decades, coming back into vogue. Equally important has been the revived interest in the collection of national...
09 Apr 2015

Trade finance in Africa

Trade finance is essential for international trade. This financial intermediation helps firms to manage risks inherent in international transactions, improve their liquidity and enable them to optimally invest to enhance their growth. In 2013, the African Development Bank (AfDB) approved a US $1-billion trade finance (TF) program to provide financing to underserved African-based financial institutions and enterprises. Apart from the fact that the need for financing must be acute, there is a great deal we do not know about the trade finance market in Africa due to data limitations. This...
02 Apr 2015

Developmental state in Africa: New wine in old bottles?

The Ivorian Government, with support from the United Nations Development Programme, the African Development Bank and the World Bank organized a well-attended International Conference on Emerging Africa that took place in Abidjan from March 18-20, 2015. The issue of the developmental state and the role it could play in Africa’s emergence took centre stage. From the point of view of President Alassane Ouattara of Côte d’Ivoire and President Macky Sall of Senegal, who opened the conference, countries do not just emerge, they need the active support of the state in the first place, to create a...
30 Mar 2015

Turbulence ahead? Africa and decision time at the US Fed

Background On March 18, 2015, the Fed indicated that it could consider raising rates during its June 2015 meeting. However, the market is skeptical, far from convinced of the possibility for faster policy normalization given the fundamentals. Investors are still betting on low interest rates for the longer term that is about 1.8% by 2017[1], while the Fed’s median projection is about 3%. This rift of expectations could indeed surprise the market if the Fed moves aggressively as it tries to avoid remaining behind the curve as was the case in the mid-2000s. A faster than expected rate...
26 Mar 2015

When are the Japanese investors coming? A conversation with the Japan Association of Corporate Executives

On the evening of March 16, 2015, I had a very insightful meeting with a high-level delegation of business executives from Japan on the sidelines of the Africa CEO Forum held in Geneva. Together they represented all the top brand names of that industrious country – the trading giant Marubeni, Toyota, Nippon Signal, Daiwa Institute of Research, Green Earth Institute, and Ernst & Young ShinNihon, accompanied by their Associates. The Group was also accompanied by the head of the Bank’s External Representation Office of Asia (ASRO), Masayuki Tamagawa. This was the first time that such a...
03 Mar 2015

G20 Development Agenda gains momentum under the Turkish Presidency

It has sometimes been said, unkindly, especially as memory of the G20’s contribution to resolving the global financial crisis recedes into the past, that close to 15 years since its establishment, the G20 is still a movement in search of a cause. The argument continues that the G20 is mainly a means for middling powers to exercise some global influence, while the annual attention paid them during their presidencies lasts. The last couple of years have seen Mexico, Russia, Australia and Turkey take the reins of this far-flung organization. With South Africa, the only African country in the G20...
12 Feb 2015

Minerals will continue to drive African economies: A view from Mining Indaba in Cape Town

Every second week of February, downtown Cape Town turns into a milling sea of humanity as serious looking chiefs of mining companies, those of their suppliers, and other personalities closely related to the industry stream from one lecture hall to the other and one exhibition to the next in search of new ideas, new machines, and new sources of financing. This has been the case also for the 2015 edition of the global mining forum, Mining Indaba. Tony Blair, the former British Prime Minister, was lined up by the organizers as a speaker for the main stage, as were a number of high-ranking...
01 Nov 2014

Knowledge and Innovation for Africa’s Structural Transformation

The African economy has experienced a notable trend break in recent years – the “average” story is now no longer that of abject poverty and escalating conflict, but rather of how best to attract investment, including in new technologies, to buttress growth and sustain and share its benefits with the population. Still, being in this situation is relatively new for Africa. In past decades the continent had lurched from crisis to crisis without respite and was lauded for its resilience, while its core challenges remained unresolved. The question being asked today is, however, whether this long...
13 Aug 2014

Can Africa’s extreme poverty be eliminated by 2030?

With the year 2015 – the MDG finishing line – approaching, post-2015 goals as they impact Africa need to be firmed. The goal of ending extreme poverty remains paramount. In this context, extreme poverty means living on a less than $1.25 a day (PPP, 2005 prices). Given the continent’s potential and the track record, the extreme poverty reduction agenda beyond the MDGs should focus on building prosperous and resilient Africa. This can be achieved with strong, sustained and inclusive growth. Globally, in 2013, the World Bank adopted two goals to guide its work for the next decade and beyond...