africa

Africa at a Fork in the Road: Taking Off or Disappointment Once Again?
In a remarkable shift, a good number of African countries are now seen as fastgrowing
frontier economies; they are attracting significant foreign direct investment
and portfolio capital and are able to issue sovereign bonds on the international capital
market. And, as is the norm for stable growing economies, many are submitting
domestic policies to international credit rating agency assessment and greater market
discipline, and not exclusively to donor and multilateral surveillance. Collectively,
countries in the region are doing well.
African countries have been learning from their own and other countries’ experiences.
The better performance over the last decade shows that they have internalized
most of those lessons; it owes much to the improved macro policy framework
and to developing the institutions and systems needed for public accountability in
economic management—all of which should serve as foundations for the future in
the new normal.
On that basis, yes, one could say that Africa has come to a fork in the road. It might
even have already passed through the fork towards sustainable development, and
the real question may well be how fast and how far Africa can run to catch up with
its peers in the rest of the world.
Still, a prudent optimist leaves room to feel a little skeptical. The developments in
Ghana over the last year show that the situation can be fragile as the economy has
come under fiscal stress, with rising inflation and currency depreciation. Similarly
in Zambia. Yet, there is much to take credit for in all that has happened during the
last decade; the performance in Ghana is very typical, if not the sterling example of
that of the so-called African frontier economies, including Zambia, where consistent
implementation of reforms has transformed the development climate.
21.4 Past the fork in the road: keeping the momentum
One of the major challenges that policymakers face down the road is mobilizing
resources to sustain and, better, boost Africa’s growth momentum, given the comparatively
low savings and investment ratios in the region. Natural resource wealth
can best be harnessed to fuel the new engine of growth and not to stall it.
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