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Economic Report on Africa 2004

Unlocking Africa’s Trade Potential

image of Economic Report on Africa 2004

The Economic Report on Africa is an annual series that reviews the continent’s economic performance and near-term prospects. This year’s report’s main conclusion is that trade liberalization alone will not boost growth and poverty reduction in Africa. In 2003, Africa was the second fastest growing developing region, yet, only 5 countries achieved the 7% or higher growth rate required to reach the Millennium Development Goal of halving poverty by 2015. FDIs inflows continued to increase but still remain largely concentrated in the natural resources sector. Although the regional outlook for 2004 is positive, with growth projected to accelerate, there are still several downside risks to be faced.

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Poor energy infrastructure hobbles export diversification

It is evident from the previous chapter that most African economies are still some distance from providing a competitive trade environment. Many countries are saddled with a commodity-dependent and largely static export base, which has tended to decline in relation to the growth in global trade. Only a very few African countries have managed to increase their market share of the Organization of Economic Co-operation and Development (OECD) imports since the 1960s. If more countries are to achieve continuing diversification of their exports they will need to improve local conditions for business and to identify the major obstacles to business development and remove them.

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