Africa: Is This the Turning Point?

Mohsin Khan, Stanley Fischer and Ernesto Hernández-Catá

No 1998/006, IMF Policy Discussion Papers from International Monetary Fund

Abstract: 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.

Keywords: PDP; SSA country; country; SSA countries globalization; GDP; Sub-Saharan Africa; Africa; growth; structural reforms; government investment ratio; SSA Excl.; SSA performer; SSA's partner; GDP ratio; aggregate current account deficit; Private investment; Infrastructure; Domestic savings; Western Hemisphere; Asia and Pacific (search for similar items in EconPapers)
Pages: 26
Date: 1998-05-01
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Citations: View citations in EconPapers (11)

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