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Africa: Is This the Turning Point?

Author

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  • Mr. Mohsin S. Khan
  • Mr. Stanley Fischer
  • Mr. Ernesto Hernández-Catá

Abstract

This paper examines the experience of Sub-Saharan Africa (SSA) to answer the question of whether the region is at a turning point in its economic fortunes. The improvement in growth reflects in part a rise in the utilization of existing capacity. To be sustained, however, a high rate of growth will require an increase in investment rates and/or an increase in total factor productivity—i.e., an improvement in the technological, political, administrative and economic factors that raise the rate of return on both capital and labor. The close link between investment and growth in developing countries over the long term is evident in the empirical growth literature. For developing countries in general, the elasticity of growth with respect to the investment/GDP ratio has been found to lie within the range of 0.3–0.5. Although increasing investment is crucial, action is also needed in many complementary areas in order to raise productivity and growth.

Suggested Citation

  • Mr. Mohsin S. Khan & Mr. Stanley Fischer & Mr. Ernesto Hernández-Catá, 1998. "Africa: Is This the Turning Point?," IMF Policy Discussion Papers 1998/006, International Monetary Fund.
    • Handle: RePEc:imf:imfpdp:1998/006
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    Citations

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    Cited by:

    1. Dupasquier, Chantal & Osakwe, Patrick N., 2006. "Foreign direct investment in Africa: Performance, challenges, and responsibilities," Journal of Asian Economics, Elsevier, vol. 17(2), pages 241-260, April.
    2. Arslanalp, Serkan & Henry, Peter B., 2006. "Debt Relief," Research Papers 1931, Stanford University, Graduate School of Business.
    3. Norman Myers & Jennifer Kent, 2001. "Food and hunger in Sub-Saharan Africa," Environment Systems and Decisions, Springer, vol. 21(1), pages 41-69, March.
    4. Ghirmai T Kefela, 2012. "China’s expanding engagement in Africa as a global influence," E3 Journal of Business Management and Economics., E3 Journals, vol. 3(4), pages 0147-0154.
    5. Simon Johnson & Jonathan D Ostry & Arvind Subramanian, 2010. "Prospects for Sustained Growth in Africa: Benchmarking the Constraints," IMF Staff Papers, Palgrave Macmillan, vol. 57(1), pages 119-171, April.
    6. Mr. Paulo Silva Lopes, 2002. "A Comparative Analysis of Government Social Spending Indicators and Their Correlation with Social Outcomes in Sub-Saharan Africa," IMF Working Papers 2002/176, International Monetary Fund.
    7. Mr. Paulo Silva Lopes, 2005. "The Disconcerting Pyramids of Poverty and Inequality of Sub-Saharan Africa," IMF Working Papers 2005/047, International Monetary Fund.
    8. Mr. Ludvig Söderling, 2002. "Escaping the Curse of Oil? The Case of Gabon," IMF Working Papers 2002/093, International Monetary Fund.
    9. Jayaraman, T-K, 1996. "Private Investment and Macroeconomic Environment in the South Pacific Island Countries : A Cross-Country Analysis," Papers 14, Asian Development Bank.

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