africa

Africa at a Fork in the Road: Taking Off or Disappointment Once Again?
have thus been magnifying the importance of these products for African national
economies.
22.3 Diversifying sources of growth underpin Africa’s potential to transform
After two decades of stagnation, Africa’s average growth rate increased to unprecedented
levels, averaging about 5 percent since 2000 (Figure 22.2 below). This
growth was broadly shared across regions and among resource-rich as well as
resource-poor countries such as Ethiopia and Rwanda. Meanwhile, African economies
are slowly diversifying and sectoral contributions to GDP have been changing. In
the early 1960s, agriculture accounted for the largest share of GDP (more than 40
percent) and was followed by services and industry. However, between 2005 and
2009, agriculture’s share of GDP fell by around 20 percentage points, with the share
of services and industry making up for the difference in roughly equal proportions.
The contribution of manufacturing to GDP actually declined during this period: from
11.5 percent in the 1960s to 10.5 percent in the 2000s.
A variety of other factors, beyond commodity production and exports and growing
assets, are expected to keep Africa’s growth buoyant in the foreseeable future.
Discussed in turn below, these include improved economic governance and political
stability, rising productivity, urbanization and growing domestic demand, positive
human development and demographic trends, a growing regional market within
Africa, and new partnerships.
22.3.1 Improved economic governance
Africa’s strong growth is partly the outcome of prudent macroeconomic governance,
management, and policy. Indeed, “Arguably more important [than the resource
boom] were government actions to end political conflicts, improve macroeconomic
conditions, and create better business climates, which enabled growth to accelerate
broadly across countries and sectors” (McKinsey Global Institute, 2010: 1). Policy
actions to reduce inflation, government and external debt, and current account
and fiscal deficits were key to establishing a stable economic base on which the
economies of Africa have prospered.
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