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Globalization and Development in Sub-Saharan Africa

image of Globalization and Development in Sub-Saharan Africa
This publication critically reviews the effects of globalization on sub-Saharan Africa over the last three decades. The large gains expected from opening up to international economic forces have, to date, been limited, while there have been significant adverse consequences. Foreign direct investment in the region has been largely confined to resource—especially mineral—extraction, even as continuing capital flight has reduced financial resources available for productive investments. Premature trade liberalization has undermined prospects for the economic development of productive capacities in many sectors – including manufacturing and agriculture -- are not sufficiently competitive to take advantage of improvements in market access.

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Resource mobilization for development

To overcome the development and poverty challenges facing SSA, strong and robust growth is widely recognized as a precondition. Many observers (e.g. Blair Commission Report, 2005) target 6-8 per cent of annual growth. It is very difficult to reduce poverty through redistribution alone when average income levels are low, as is the case in SSA, although growing income inequality certainly has not helped. Further, political stability and development prospects decrease with greater economic insecurity (UN 2008). However, there is little evidence that the policies of the three decades have helped the SSA region mobilize resources to finance such growth, to reduce economic insecurity and to generate investment and structural transformation.

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