## Africa’s Success: More Than A Resource Story

_IMF Blog, October 31, 2013_

## Source details

**Canonical URL:** [Africa’s Success: More Than A Resource Story](https://www.imf.org/en/blogs/articles/2013/10/31/africas-success-more-than-a-resource-story)

## Other formats

- [Markdown version](/en/blogs/articles/2013/10/31/africas-success-more-than-a-resource-story/index.md)
- [Structured JSON version](/en/blogs/articles/2013/10/31/africas-success-more-than-a-resource-story/index.json)
- [Bundle manifest](/en/blogs/articles/2013/10/31/africas-success-more-than-a-resource-story/bundle-manifest.json)

## Bibliographic details
- Authors: Antoinette M Sayeh
- Published: October 31, 2013

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### Overview and main finding
- Author: Antoinette M. Sayeh
- Date: October 31, 2013
- Core conclusion: Africa’s continued success since the mid-1990s is more than a “commodity story”; several economies have become high performers without basing their success on natural resources, driven largely by sound policymaking.

### Case-study approach and period covered
- Countries studied: Burkina Faso, Ethiopia, Mozambique, Rwanda, Tanzania, and Uganda.
- Analysis period: 1995–2010.
- Common pattern identified: turnaround from macroeconomic distress (often following destructive conflict) supported by encompassing visions and strategic frameworks.

### Country-specific highlights
- Burkina Faso:
  - Focused on institutional strengthening and early medium-term macroeconomic planning.
  - Skillful management of the cotton sector important for livelihoods of many poor people.
- Ethiopia:
  - By far the most populous country in the sample.
  - Accelerated growth by actively supporting agriculture and certain export products and services (cut flowers, tourism, and air travel).
- Mozambique:
  - Attracted significant foreign investment and external capital flows in the late 1990s.
  - Funded capital-intensive megaprojects to produce and transmit electricity and gas; electricity used to produce aluminum.
- Rwanda:
  - Rebounded after achieving political stability.
  - National recovery strategy focused on specific sectors such as tourism and coffee.
- Tanzania:
  - Achieved sustained high growth through three well sequenced waves of macroeconomic and structural reforms reaching across all sectors.
- Uganda:
  - Began significant macroeconomic and structural reforms just before 1990.
  - Stimulated private investment and launched export diversification into nontraditional products.

### Virtuous circle and fiscal space
- Mechanism described:
  - Sensible, medium-term–oriented policymaking and structural reforms → attracted higher aid flows and debt relief → released domestic resources.
  - These gains created “fiscal space” for expanded social spending and capital investment, particularly infrastructure → contributed to higher growth.
- Fiscal behavior:
  - The six countries created and used fiscal space wisely.
  - Benefits included early debt relief and relatively large external flows (budgetary aid and foreign direct investment).
  - Investment rates in the sample countries were higher than peers and focused on infrastructure, health, and education.
  - Mozambique experimented with public-private partnerships for railway lines, ports, and toll roads.

### Importance of agriculture and services
- Agriculture:
  - Still of enormous importance in most sample countries.
  - Employment shares in agriculture:
    - about 80 percent in Mozambique and Burkina Faso
    - 71 percent in Uganda
    - 65 percent in Tanzania
  - Poor and extremely poor are concentrated in rural areas and often rely on subsistence farming.
  - Ethiopia and Rwanda show that government programs providing access to seeds and fertilizers can dramatically improve agricultural yields.
- Services and telecommunications:
  - Services were an important growth driver, partly reflecting expansion of telecommunications.
  - Mobile phones serve as tools for communication, dissemination of market prices for crops, and mobile banking—enhancing financial inclusion for very poor people outside the formal financial system.

### Infrastructure and remaining challenges
- Despite massive investment, infrastructure still falls short of meeting basic needs in the sample countries.
- Specific constraints:
  - Continuous power cuts and electricity shortages hamper business operations.
  - Lack of roads prevents farmers from marketing products effectively.
- Policy implication: sustained and high investment in infrastructure—particularly in energy and transportation—remains crucial.

### Overall trajectory and outlook
- The six studied countries have transformed into high performers even without being natural resource producers.
- With the right policies, these countries are positioned on a trajectory to becoming emerging markets.

*Source: Africa’s Success: More Than A Resource Story (Antoinette M. Sayeh, October 31, 2013).*

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## Content in this bundle

- **Regional Economic Outlook: Sub-Saharan Africa - Keeping the Pace, October 2013**
  - [Regional Economic Outlook: Sub-Saharan Africa - Keeping the Pace, October 2013 (Markdown version)](/external/pubs/ft/reo/2013/afr/eng/sreo1013.pdf.md){rel="alternate" type="text/markdown"}
  - [Regional Economic Outlook: Sub-Saharan Africa - Keeping the Pace, October 2013 (PDF)](/external/pubs/ft/reo/2013/afr/eng/sreo1013.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/blogs/articles/2013/10/31/africas-success-more-than-a-resource-story_