Africa: Is This the Turning Point?

By Mohsin S. Khan, Stanley Fischer, Ernesto Hernández-Catá

May 1, 1998

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Mohsin S. Khan, Stanley Fischer, and Ernesto Hernández-Catá. Africa: Is This the Turning Point?, (USA: International Monetary Fund, 1998) accessed October 6, 2024

Summary

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.

Subject: Domestic savings, Expenditure, Globalization, Infrastructure, National accounts, Private investment

Keywords: Africa, Aggregate current account deficit, Asia and Pacific, Country, Domestic savings, GDP, GDP ratio, Government investment ratio, Growth, Infrastructure, PDP, Private investment, SSA countries globalization, SSA country, SSA Excl., SSA performer, SSA's partner, Structural reforms, Sub-Saharan Africa, Western Hemisphere

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Policy Discussion Paper No. 1998/006
Stock No:

PPIEA0061998
ISBN:

9781451972061
ISSN:

1564-5193

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