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
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.
In spite of good macroeconomic performance over the past decade, inflation in four leading East African economies – Ethiopia, Kenya, Tanzania and Uganda – has risen sharply. The inflation rate in Ethiopia was nearly 40 percent in October 2011 before leveling off to 32 percent in January 2012. Although inflation in Uganda decelerated to 25.7 percent in January 2012 from a high of 30.4 percent in October 2011, it is still far higher than expected, compared to the 3 percent rate at the end of 2010.
In the 1970s and 80s most African countries suffered from scourges of high inflation. During the period between the mid-1990s and the early 2000s, inflation was brought under control thanks to better macroeconomic management. However, recently the specter of hyperinflation is back. In particular, inflation rates in East African countries such as Kenya, Uganda and Ethiopia almost doubled or tripled over the past year.