ABSTRACT

After a prolonged decline in the 1980s and early 1990s, Africa’s economic growth prospects have improved in recent years, real GDP averaging 3.8 per cent per annum between 1995 and 1998. The recovery has occurred on the back of economic reforms introduced since the 1980s, evidenced by a progressive reduction in budget deficits and inflation rates and the achievement of more realistic exchange rates and real interest rates. However, despite this improvement, the performance so far achieved still falls short of the continent’s potential and is not sufficient to deal with the growing scourge of poverty. Current per capita growth rates are still below those achieved in the 1960s and early 1970s, when real per capita GDP was increasing at more than 3 per cent per annum. We argue here that higher and sustained levels of economic growth in Africa cannot be achieved except through the promotion of the still nascent private sector as a dynamic engine for development.