Africa’s Economic House Divided

Across Africa, almost all governments praise economic modernization as the cornerstone of prosperity and the yardstick by which their effectiveness should be measured. But too many African leaders have been willing to spend a fortune to equip their countries with state-of-the-art settlement systems, only then to proceed to exclude their citizens from using them.

DAKAR – The world economic downturn and financial-market tremors have strained budgets across Africa. With the exception of Ghana, and a few other states, in 2009 most African countries’ fiscal balances deteriorated. But, thanks to prudent management of public finances during previous periods of robust growth, a significant number of African countries have endured the current crisis in better fiscal shape than during past crises.

In 2009, aggregate GDP growth in Africa averaged 1.6%, down from about 5.7% during the 2002-2008 period – but growth all the same. Moreover, several African countries continued to implement long-term reforms to improve their business and investment climate, despite the daunting challenges presented by the crisis. Now that international trade and global industrial production are on the mend, sub-Saharan economies look set for more robust growth, as demand for and prices of oil and other minerals rebound and general economic activity resumes.

Of course, numerous downside risks – adverse weather shocks, military conflict, and political turmoil – still can undermine the hard-earned benefits of this social and economic record. But it is the dichotomized nature of their economies and finances that represents Africa’s most intractable structural imbalance. Frankly, two Africa’s are emerging: a modern economy and a cash-based economy.

To continue reading, please log in or enter your email address.

Registration is quick and easy and requires only your email address. If you already have an account with us, please log in. Or subscribe now for unlimited access.


Log in;
  1. China corruption Isaac Lawrence/Getty Images

    The Next Battle in China’s War on Corruption

    • Chinese President Xi Jinping knows well the threat that corruption poses to the authority of the Communist Party of China and the state it controls. 
    • But moving beyond Xi's anti-corruption purge to build robust and lasting anti-graft institutions will not be easy, owing to enduring opportunities for bureaucratic capture.
  2. Italy unemployed demonstration SalvatoreEsposito/Barcroftimages / Barcroft Media via Getty Images

    Putting Europe’s Long-Term Unemployed Back to Work

    Across the European Union, millions of people who are willing and able to work have been unemployed for a year or longer, at great cost to social cohesion and political stability. If the EU is serious about stopping the rise of populism, it will need to do more to ensure that labor markets are working for everyone.

  3. Latin America market Federico Parra/Getty Images

    A Belt and Road for the Americas?

    In a time of global uncertainty, a vision of “made in the Americas” prosperity provides a unifying agenda for the continent. If implemented, the US could reassert its historical leadership among a group of countries that share its fundamental values, as well as an interest in inclusive economic growth and rising living standards.

  4. Startup office Mladlen Antonov/Getty Images

    How Best to Promote Research and Development

    Clearly, there is something appealing about a start-up-based innovation strategy: it feels democratic, accessible, and so California. But it is definitely not the only way to boost research and development, or even the main way, and it is certainly not the way most major innovations in the US came about during the twentieth century.

  5. Trump Trade speech Bill Pugliano/Getty Images .

    Preparing for the Trump Trade Wars

    In the first 11 months of his presidency, Donald Trump has failed to back up his words – or tweets – with action on a variety of fronts. But the rest of the world's governments, and particularly those in Asia and Europe, would be mistaken to assume that he won't follow through on his promised "America First" trade agenda.