The image of an Africa ready to take off economically is being undercut by the image of an Africa increasingly mired, once again, in political turmoil, civil unrest, and armed conflict. Now is the time for the international community and regional groupings to intensify their efforts to secure lasting peace across the continent. And now is the time for Africa itself to say “enough.” For only with peace can Africa attract the trade and capital flows it so desperately needs. And only with peace can Africa’s citizens enjoy the benefits of sustained high-quality growth and join the global economy of the new millennium.
Ultimately, Africa holds its destiny in its own hands. What should it be doing? Besides maintaining macroeconomic stability, it can help strengthen the virtuous circle of better policies and higher growth by the intensified pursuit of good governance and by focusing, above all, on five key policy areas:
• ensuring a predictable environment for investment by promoting good governance, transparency, and accountability and by shunning all forms of corruption and cronyism. This is vital to remove the sense of uncertainty that still too often plagues investor decision-making.
• strengthening human capital by giving priority to education and health in public expenditure. This is vital to help spur more broad-based sustainable growth and greater poverty reduction.
• strengthening the financial sector. This is needed to better mobilize savings and enhance financial intermediation.
• speeding up trade liberalization. This will boost the efficiency and competitiveness of domestic producers, along with enabling African countries to benefit more from the liberalization of other countries’ trade barriers and the growth of world trade.
• deepening regional integration. This would allow African countries to better overcome the disadvantages of their relatively small economies, permit them to realize economies of scale, and enhance their ability to trade on a global basis.
Photo Credits: Denio Zara and Padraic Hughes for the IMF.