Africa: Is This the Turning Point?
IMF Policy Discussion Papers, May 1, 1998
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Bibliographic details
- Authors: Mohsin S. Khan, Stanley Fischer, Ernesto Hernández-Catá
- Published: May 1, 1998
- Series: IMF Policy Discussion Papers
- DOI: https://doi.org/10.5089/9781451972061.003
Main question and scope
- Examines whether Sub-Saharan Africa (SSA) is at a turning point in its economic fortunes.
- Focuses on drivers needed to sustain a high rate of growth in SSA.
Key findings on recent growth dynamics
- Recent improvement in growth reflects in part a rise in the utilization of existing capacity.
- Sustaining a high rate of growth will require:
- an increase in investment rates and/or
- an increase in total factor productivity (improvements in the technological, political, administrative and economic factors that raise the rate of return on both capital and labor).
Empirical evidence and quantitative relationship
- 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.
Policy implications and recommendations
- Increasing investment is crucial to sustain higher growth in SSA.
- Complementary actions are needed to raise productivity and growth, including improvements in:
- technological factors,
- political and administrative environments,
- economic policies that raise rates of return on capital and labor.
Source: Africa: Is This the Turning Point? by Mohsin S. Khan, Stanley Fischer, Ernesto Hernández-Catá (IMF Policy Discussion Papers), May 1, 1998.
Content in this bundle
- Africa: Is This Turning Point? - PPAA/98/6