africa

Yale Center for the Study of Globalization
On the back of these contestations, this paper wades into the debate and examines
whether the recent growth experience in Africa is likely to be sustainable or whether
there is a possibility of growth reversals like those that happened after previous high
growth periods. By investigating the likelihood of growth reversals in Africa following
the recent impressive performance, we hope to contribute to the small but growing
literature on growth reversals, accelerations, and sustainability.
Thus our approach contrasts with the long-term, cross-country growth studies
popular since Barro (1991). Using panel data from 1970-2007, we find that more
democratic and politically stable countries experience fewer growth reversals but
that democracy does not substitute for political stability—implying that improved
democracy in a politically unstable country does not reduce the likelihood of growth
reversals. The variable with the greatest impact on reducing growth reversals is
improvement in a country’s higher education and skills. Basic education, by contrast,
plays an important role in reducing growth reversals only in autocratic regimes.
Diversification into manufacturing is found to increase growth reversals in Africa,
possibly because these countries diversify into new products and sectors in which
they do not have comparative advantage. Papageorgiou and Spatafora (2012) note
that diversification into new products and sectors with limited scope for increases
in productivity and quality may result in less broad-based and sustainable growth.
They argue that for low-income countries (LICs) with small economic size and limited
potential to exploit economies of scale, diversification may result in a high cost of
moving into many new products, making quality upgrading within existing products
all the more important in the early stages of diversification.
The paper is organized as follows: Section 29.2 reviews recent growth trends in
Africa; Section 29.3 discusses the concept of growth reversals and its measurement;
Section 29.4 lays out the methodology and the data used; Section 29.5 discusses
the results, and Section 29.6 concludes.
29.2 Recent growth trends in Africa
Between 2002 and 2011, Africa’s GDP grew at an average of 5.3 percent a year and
per capita GDP grew at 2.5 percent a year. Growth in 2012 was 6.6 percent. Leibfritz
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