factors affecting economic growth in africa

Economic growth accelerated across the continent, in 27 of its 30 largest economies. Investment in humancapital enhances the workforce's ability to work and increasesproductivity. Given the huge financial costs and the effect on Africas economic growth, it remains imperative to prevent the prevalence of conflicts. 0000008657 00000 n Factors Affecting Economic Growth in Africa: Are There any L PDF Corruption, economic growth, and income inequality in Africa Already, spending by consumers and businesses in Africa totals $4 trillion. Banking and telecom, in particular, are expanding thanks to a series of economic reforms. The economies in the pretransition segmentthe Democratic Republic of the Congo, Ethiopia, Mali, and Sierra Leoneare still very poor, with GDP per capita of just $353one-tenth that of the diversified countries. Economic growth is constrained by poor infrastructure, unreliable power, low agricultural productivity, poor governance, and lack . 4 0 obj Altogether, the McKinsey report predicts $5.6 trillion in African business opportunities . While Africas collective long-term prospects are strong, the growth trajectories of its individual countries will differ. 0000008143 00000 n The cause of this economic growth is the dependence of foreign countries on exporter products, which leads to long-term development. For others still on the sidelines, early entry into emerging economies provides opportunities to create markets, establish brands, shape industry structures, influence customer preferences, and establish longterm relationships. The key reasons behind this growth surge included government action to end armed conflicts, improve macroeconomic conditions, and undertake microeconomic reforms to create a better business climate. But many pretransition economies are now growing very fast. Thanks for excellent info I was looking for this information for my mission. The authors wish to acknowledge the contributions of the following colleagues to this article: Martijn Allessie, Charles Atkins, Mutsa Chironga, Norbert Drr, Reinaldo Fiorini, Michael Kloss, Corrado Ruffini, Sven Smit, Amine Tazi-Riffi, Till Zeino-Mahmalat, and Nadia Terfous. 6 Leading Factors for Africa's Economic Growth In the past, Africa has relied a lot on foreign direct investments to fuel its economies. Over the last 20 years, three-quarters of the continents increase in GDP per capita came from an expanding workforce, the rest from higher labor productivity. 0000002360 00000 n Until the COVID-19 pandemic, Kenya was one of the fastest growing economies in Africa, with an annual average growth of 5.9% between 2010 and 2018. Download an executive summary or read the full report, Lions on the move: The progress and potential of African economies.

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