Abstract
Dear readers,
The articles presented in this issue tackle some of the most significant challenges Africa will face in its path toward convergence in the coming decades.
In “Regional and Country Policy Issues in Africa,” Theodore Ahlers lays the foundation for this volume, arguing that though Africa has been growing and its indicators have been improving in many ways, it is no longer converging with the rest of the world. The article identifies key regional and country-specific issues that require urgent attention: demographics, commodity dependence, low savings and investment, slow productivity growth, conflict and fragility, climate change, inequality and disparities, and politics and political leadership. He argues though that convergence is still possible but will require bold actions in these areas. He also notes that there is significant divergence within the continent, with many countries exhibiting growth rates of over 3 percent annually, while still others stagnate or decline. In that sense, he points out that if African best practices could be generalized, it would greatly improve the continent’s situation.
In “The impact of Commodity Terms of Trade in Africa: Curse, Blessing, or Manageable Reality?” Claudio Loser and Ieva Vilkelyte examine the recent decline in commodity exporters’ terms of trade and analyze how African economies have been affected and how they reacted to the decline. They argue that the commodity boom is indeed over, and leaders of African economies dependent on commodity exports should not be given the false impression that prices will recover or that current rates of growth will persist. They note that losses will catch up, even if terms of trade do not deteriorate further, and if African economies are not properly structured to withstand further shocks to their terms of trade, there could be significant negative consequences, particularly for the numerous commodity-dependent economies on the continent.
In “Infrastructure in Africa,” James Bond explores the various dimensions of Africa’s infrastructure deficit by identifying where the major gaps exist, what is required to fill those gaps, and how Africa can go about addressing them. He argues that Africa’s poor infrastructure is a significant impediment to economic growth and regional integration, and if Africa is to achieve convergence, the stock and quality of infrastructure must be improved. Equally as problematic as the lack of infrastructure, he notes, is the poor maintenance and management of the existing stocks of infrastructure, often due to weak institutional capacity and the national and sub-national levels. Finally, he addresses the issue of financing and presents some potential new alternatives to traditional infrastructure financing sources, so Africa can meet the massive investment needed to finance infrastructure required for sustainable growth.
Finally, our issue ends with a focus on one of the broader and more systemic challenges for Africa. In “Regional Integration in Africa,” Hasan Tuluy connects to Bond’s article, with a focus on the challenge of regional integration on the continent. Africa, he argues, remains a fragmented continent, and progress toward regional integration has been slow and challenging. Regional cooperation, he argues, particularly in a continent with so many small and landlocked countries, is necessary to build larger markets and facilitate intra-regional trade. Rather than the top–down, bureaucratic approach that has characterized African regional institutions for decades, Tuluy points to an Asian model of integration, which prioritizes bottom–up strategies, built on coalitions of governments, the private sector, and other stakeholders.
Poverty and inequality still plague much of the African continent, and economic growth has slowed in the wake of the end of the commodity supercycle. The authors in this volume, while realistic about the problems that Africa faces, recognize that the problems are not insurmountable. As they argue, it will surely take dramatic breaks from current policy trajectories, and hard choices must be made by leaders in governments, the private sector, and civil society.