Despite notable economic recovery in Africa since the turn of the 21st century, the continent still faces important challenges in attaining its development goals. Being highly commodity dependent, growth remains volatile and too low for achieving the MDGs, while pressure from oil prices threatens price stability in oil-importing countries. Macroeconomic balances are driven by developments in the resource sector and continue to worsen for oil-importing African countries. Moreover, external debt remains high and private capital flows insufficient to bridge the gap between domestic savings and necessary investment for Africa to meet the MDGs.
In order to accelerate and sustain growth over a long period of time, Africa needs to create a policy space and embark on innovative growth strategies. In particular, it should address the factors contributing to low and volatile growth through: improved macroeconomic management; increased domestic investment, which requires mobilization of internal and external resources; improved infrastructure (especially transport and energy supply), and diversification away from resource sectors.
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