Sub-Saharan Africa: Diversifying for Tomorrow

IMF Blog, February 16, 2018

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Countries in sub-Saharan Africa need to diversify their economies, and the region’s youth need to be at the heart of it, says Axel Schimmelpfennig.
Schimmelpfennig is head of the IMF team for Uganda, and a coauthor of a study that looks at the potential benefits of a stepped-up diversification agenda in sub-Saharan Africa.
Publication date: February 16, 2018.

“First, diversification on average is associated with higher growth, especially at earlier stages of development."
“Second, growth volatility is lower, so there’s a steady growth path from year to year.”

With sub-Saharan Africa’s rapidly growing population, the youth are best placed to learn about, invent, and use new technologies to start businesses and develop those economic sectors that are small or nonexistent.
“Looking ahead, the challenge is for young people in school today to equip themselves with the skills they need to get into higher productivity jobs so that they can enjoy higher living standards.”
“Because tomorrow’s jobs are most likely going to be very different from today’s, they will require even more skills. So, education—helping the young people to succeed—is one of the key challenges to making all of this happen.”

Need to increase productivity in areas like agriculture and manufacturing to become more competitive in the export market and allow for increasing wages.

A renewed focus on macroeconomic stability.
Improved access to credit.
Good infrastructure.
A conducive business environment.
A skilled workforce.
Income equality.
“The right policy mix would build on each country’s strengths and help create an environment for the private sector to expand.”

Listen to the full podcast (as referenced).
Read more of the Regional Economic Outlook for Sub-Saharan Africa, October 2017.
Other readables mentioned: Sub-Saharan Africa: The Path to Recovery; More People, More Technology, More Jobs: How to Build Inclusive Growth.

IMFBlog is a forum for the views of the International Monetary Fund (IMF) staff and officials on pressing economic and policy issues of the day.
The IMF, based in Washington D.C., is an organization of 191 countries, working to foster global monetary cooperation and financial stability around the world.
The views expressed are those of the author(s) and do not necessarily represent the views of the IMF and its Executive Board.

Content based on "Sub-Saharan Africa: Diversifying for Tomorrow" (February 16, 2018).