AfDB: Championing inclusive growth across Africa. A blog by the former Chief Economist and Vice-President
For the past decade, Africa has had strong growth. A new economic momentum has been created. The continent weathered the financial crisis and has bounced back. But headline economic growth is not enough. Deliberate policies to reduce inequalities and promote inclusion are now needed more than ever before. It is time to focus on what people want: decent work, a living wage, access to basic service, more democracy and accountable governments. Africa and its people aim to be a pole of growth in the decades ahead. Read more
Steve Kayizzi-Mugerwa, PhD, is Acting Chief Economist and Vice-President at the African Development Bank. He has a long and extensive experience in economic and development research garnered at the University of Gothenburg, where he received his PhD in 1988 and later became Associate Professor. He has undertaken research collaboration at many universities, including Makerere, Nairobi, Lusaka, Helsinki and Cornell. He has been external examiner at University of Cape Town, Stockholm’s Handelshogskolan, Lund University and Dar es Salaam. He was a Senior Economist at the IMF and a Fellow and Project Director at the World Institute of Development Economics Research of the UN University, based in Helsinki.
At the African Development Bank he has been Director of Research, Regional Director of East Africa (B), Director of Policy, Lead Economist and Head of the Extended Mission to Zimbabwe, and, during his first tenure at the Bank in the early 1990s, he was a Senior Economist. His latest publication is a debate article for the Society of International Development Journal entitled: “Banana Out of Republic? On the Political Economy of Africa’s Transformation.”
He was born and raised in Uganda but also holds Swedish nationality.
As African countries seek today to consolidate their growth through increased foreign borrowing, the words “de ja vu” are frequently cited, with experts’ eyes on the implications for debt distress. Some thirty five years ago, the Latin American economies had enjoyed similarly high growth levels buttressed by large inflows from US private banks, at sub-prime rates.
Africa’s growth resurgence during the past decade and its persistence have taken many watchers of the continent by surprise. The international media have been busy coining labels to match this unexpected turn of fortune – “Africa rising” being the commonest and most misleading label to date. Interestingly, Africa’s recent high growth has also revived general interest in its administrative and planning processes, with national development plans and visions, all but abandoned in past decades, coming back into vogue.
Trade finance is essential for international trade. This financial intermediation helps firms to manage risks inherent in international transactions, improve their liquidity and enable them to optimally invest to enhance their growth. In 2013, the African Development Bank (AfDB) approved a US $1-billion trade finance (TF) program to provide financing to underserved African-based financial institutions and enterprises.
The Ivorian Government, with support from the United Nations Development Programme, the African Development Bank and the World Bank organized a well-attended International Conference on Emerging Africa that took place in Abidjan from March 18-20, 2015. The issue of the developmental state and the role it could play in Africa’s emergence took centre stage.
On March 18, 2015, the Fed indicated that it could consider raising rates during its June 2015 meeting. However, the market is skeptical, far from convinced of the possibility for faster policy normalization given the fundamentals. Investors are still betting on low interest rates for the longer term that is about 1.8% by 2017 , while the Fed’s median projection is about 3%.
When are the Japanese investors coming? A conversation with the Japan Association of Corporate Executives
On the evening of March 16, 2015, I had a very insightful meeting with a high-level delegation of business executives from Japan on the sidelines of the Africa CEO Forum held in Geneva. Together they represented all the top brand names of that industrious country – the trading giant Marubeni, Toyota, Nippon Signal, Daiwa Institute of Research, Green Earth Institute, and Ernst & Young ShinNihon, accompanied by their Associates.
It has sometimes been said, unkindly, especially as memory of the G20’s contribution to resolving the global financial crisis recedes into the past, that close to 15 years since its establishment, the G20 is still a movement in search of a cause. The argument continues that the G20 is mainly a means for middling powers to exercise some global influence, while the annual attention paid them during their presidencies lasts.
Every second week of February, downtown Cape Town turns into a milling sea of humanity as serious looking chiefs of mining companies, those of their suppliers, and other personalities closely related to the industry stream from one lecture hall to the other and one exhibition to the next in search of new ideas, new machines, and new sources of financing.
The African economy has experienced a notable trend break in recent years – the “average” story is now no longer that of abject poverty and escalating conflict, but rather of how best to attract investment, including in new technologies, to buttress growth and sustain and share its benefits with the population. Still, being in this situation is relatively new for Africa.