Africa’s great opportunity for reform

First the bad news. After fifteen years in the global economic growth fast lane, sub-Saharan Africa is reeling from the effects of falling commodity prices, depressed Chinese demand, and deteriorating financial conditions. The IMF has revised growth forecasts down to 3.5% for 2016, from an annual average rate in excess of 5% since 2000.

Now for the good news. Africa’s economic slowdown is a wake-up call and an opportunity to rethink an economic model that is failing. The impressive growth record of the past 15 years has roughly doubled output, but with limited results for poverty reduction, job creation and productivity. Already extreme inequality is rising in many countries.
Manufacturing has stagnated.
The challenge for policy-makers is to set a course for recovery that supports more inclusive growth, while preparing the ground for an economic transformation.
Meeting that challenge in the midst of an economic downturn will not be easy. Having ridden the wave of the commodity super-cycle, Africa has been hit hard by the slump in oil and metal prices. Dependent on oil for 70% of government revenue, Nigeria has been forced to turn to the World Bank and the African Development Bank for an emergency loan to plug an expanding budget deficit. Weak commodity prices are magnifying already unsustainable fiscal deficits in Ghana and Zambia.Read more: The Guardian