Dani Rodrik concludes in his paper An African Growth Miracle?
Images courtesy of Dani Rodrik
The balance of the evidence I have reviewed here suggests caution on the prospects for high growth in Africa. Much of the recent performance seems to be due to temporary boosts:an advantageous external context and making up of lost ground after a long period of economic decline.While the region’s fundamentals have improved, the payoffs to macroeconomic stability and improved governance are mainly to foster resilience and lay the groundwork for growth, rather than to ignite and sustain rapid productivity growth. The traditional engines behind rapid growth and convergence,structural change and industrialization, are operating at less than full power.
So my baseline would be that we should expect moderate and steady growth, perhaps as much as 2 percent per capita, as long as the external environment does not deteriorate significantly and China manages its own substantial challenges well. I hasten to point out that a growth rate of 2 percent on a sustained basis is not bad at all. In all likelhood, this will also produce some convergence with the more advanced economies,largely because the latter will not do very well in the decades ahead. My story is not one of Afro-pessimism, but one of curbing our enthusiasm, as Oliver Sabot aptly summarized at the dinner following my lecture.
I can make one other prediction, perhaps one that I feel even more confident about. If African countries do achieve growth rates substantially higher than what I have surmised,they will do so pursuing a growth model that is different from earlier miracles based on industrialization. Perhaps it will be agriculture-led growth. Perhaps it will be services. But it will look quite different than what we have seen before.More here
Images courtesy of Dani Rodrik