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Economic Development in Africa report 2014

Catalysing Investment for Transformative Growth in Africa

image of Economic Development in Africa report 2014
The Economic Development in Africa Report 2014 addresses the current state of development in Africa. Over the past decade, African countries have had relatively good economic growth performance. But average investment rates on the continent remain low relative to what is considered necessary to achieve national development goals and relative to the average rate for developing countries. These facts suggest that Africa’s recent growth may be fragile and that it is unlikely to be sustained in the medium to long term if current trends continue. The key question, then, is how can African Governments catalyse investment for sustained and transformative growth? This report addresses that question

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Policies for catalysing investment in Africa: national and regional aspects

This chapter discusses policies that are necessary at the national and regional levels to catalyse investment for transformative growth in Africa. It draws on the empirical facts and challenges to boosting investment in Africa discussed in the previous two chapters. It underscores the fact that catalysing investment to achieve high, sustained and transformative growth in Africa requires boosting the quantity of investment, ensuring that it goes to strategic or priority sectors of an economy and improving the productivity or quality of that investment. Most discussions on investment in Africa tend to focus on the quantity issue. However, the historical experiences of developed and emerging economies suggest that enhancing the quality of investment and ensuring that it goes to productive and strategic sectors are also necessary to maximize its impact in an economy. Against this background the policy recommendations discussed in this chapter will be organized around the following three areas: increasing the level and rate of investment; ensuring that investment goes to priority sectors; and improving the productivity or quality of investment.

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