The two lost decades from 1981 to 2000 set Sub-Saharan Africa back in level of gross domestic product (GDP) and economic growth and development, as real GDP averaged just around 2.3 per cent. However, as resurgence began to happen real GDP growth averaged much higher, at near 6 per cent between 2001 and 2010. And this was significantly greater than the 3.6 per cent for the world as a whole over the same period. For the first time in over 30 years, Africa’s economic growth rate was stronger than the global average and from a very miserable situation in the 20 year period before the year 2000.
The key challenge for Sub-Saharan Africa now is how to turn any revival into strong, sustained, and shared growth that will lead to visible improvements in people’s lives.
Although COVID 19 has brought a dampening effect, African economies must continue the improvements in macroeconomic management, especially in good fiscal, monetary, budgetary and exchange rate policies. Even so, it doesn’t really mean much, if well paying jobs are not being created and there is no appreciable improvement in the level of living. This means that Africa must keep a clear focus on strengthening the institutional, infrastructural, and human capital requirements for a strong and competitive private-sector-led development. In fact, this really means focusing particularly on policies and interventions that open up opportunities for entrepreneurship, innovation, skills development and employment for the people.
The government is very important in developing countries and must play its role in creating an enabling environment for mass participation in the development process.
For Africa to be globally competitive, it would have to show rising productivity. Africa will have to develop the capital – physical and human; and the technology needed to produce larger amounts of output, with given quantities of labor. In addition, the economy would have to be diversified away from just being natural resource-dependent. Without this, there will be excess and unskilled labor, which can become destructive free radicals in the midst of perverse competition for an opportunity.
Good thing, there are signs that after COVID the world will be ready for growth poles to emerge in Africa. African countries that minimize conflict and have good governance and sustained macroeconomic traction to showcase, can seize this opportunity and become leaders for the rest of Africa to follow.