||Like it? PLEASE +1 it! Thanks!|
5.3 Conclusion: Economic Report on Africa 2007
This chapter has shown that there are clear and measurable determinants of diversification
in Africa at the continental, subregional and country level. Despite the
inadequacy of African data, it may be said that, at least at the continental level, the
diversification process is highly influenced by investment, per capita income, level
of openness, macroeconomic policy stances, governance, and conflict. High levels of
investment and rising per capita incomes are necessary for deepening diversification.
However, both these determinants have a U-shaped relationship with diversification,
indicating that there are two stages to the pattern. Initially, increasing investment
and per capita income lead to diversification and after a given level, a turning point
is reached where further increases lead to specialization.
Another important conclusion from our discussion is that trade liberalization in
Africa could have led to more specialization rather than to diversification. The specialization
forces that led African countries to optimize their comparative advantages
as they became more open have, on average, overshadowed the important motivation
for diversification, which is to shield the economy from shocks.
Another significant conclusion from the regional results is that macroeconomic stability
matters for diversification. High inflation and unstable exchange rates undermine
diversification. On the fiscal side, conservative fiscal policy clearly emerged as
countering diversification forces. Besides macroeconomic policy stances, conflicts
undermine diversification while good governance promotes diversification.
Another issue that has been discussed in this chapter is that related to the link
between diversification and economic growth. The analyses have shown that deepening
diversification leads to improvements in TFP, among other determinants.
The significance of the link between diversification and economic growth in the
case of African economies cannot be gainsaid. It means that African countries can
scale up economic growth and raise their TFP by pursuing policies that enhance
Given the clear determinants of diversification, the key conclusion is that pursuing
economic and non-economic policies that lead to export diversification can go a
long way to overcoming the growth constraints emanating from factor accumulation
(box 5.2). African countries should aim at raising their levels of investments,
improving governance, eliminating conflicts, adopting non-conservative fiscal policies
and ensuring macroeconomic stability in addition to pursuing industrial and
trade policies that foster economic diversification. The overall results of such policies
are enhanced export diversification and, eventually, increased contribution of TFP
to economic growth.
Related Articles4.0 Diversification trends in Africa: Economic Report on Africa 2007
1.8 References: Economic Report on Africa 2007
V. D. The Future of China-Africa Economic Relations: FACTORS INFLUENCING THE GROWING TIES
References: What Drives China’s Growing Role in Africa?
CONCLUSION: What Drives China’s Growing Role in Africa?
2.0 Gender in African economies: Gender Entrepreneurship and Competitiveness in Africa, 2007
What Drives China’s Growing Role in Africa?
III. A. China’s African Policy and New Commitments for 2007–09: THE ROLE OF CHINA’S PUBLIC SECTOR
Least Developed Countries Report, 2007
SMEs - opportunities in Africa
Introduction: Human Capital and Economic Development
III. C. Commercial Policies: THE ROLE OF CHINA’S PUBLIC SECTOR
V. B. African Demand for Infrastructure: AID VS. COMMERCE: FACTORS INFLUENCING THE GROWING TIES
Go to Africa, Young Investor
Is Africa Choking on its own development?
IV. A. Private Traders: THE ROLE OF THE PRIVATE SECTOR
II.a Merchandise Trade: TRADE AND CAPITAL FLOWS BETWEEN CHINA AND AFRICA
II.C. Other Debt-Creating Financial Flows: TRADE AND CAPITAL FLOWS BETWEEN CHINA AND AFRICA
Wall Street, “Africa is Investing’s Final Frontier”
Home > African-Accounts > United Nations Economic Commission for Africa > 53 Conclusion Economic Report on Africa 2007 > Google +
Free PDF Download
VI. Module III: National, Regional, and International Support
By United Nations Economic Commission for Africa
About the Author: United Nations Economic Commission for Africa
RSS for United Nations's articles - Visit United Nations's website
The United Nations Economic Commission for Africa (ECA) is the regional arm of the United Nations, mandated to support the economic and social development of its member States, foster intra-regional integration, and promote international cooperation for Africa's development.
Click here to visit United Nations's website.
More from United Nations Economic Commission for Africa
60 The Way Forward Economic Report on Africa 2007
IV Principle I Prioritize Group Formation and Networking
22 Sectoral performance III Economic Report on Africa 2007
21 Growth performance I Economic Report on Africa 2007
Principle IV Prioritize Operational Efficiency
Related Forum PostsReport or Newsletter
Re: need advice
Re: Newbie from Africa
Adventure travel to Africa.
Re: Global Moderators
Share this article. Fund someone's dream.
Share this post and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.
By: Evan Carmichael
By: Evan Carmichael
||Like this page? PLEASE +1 it!|