Macroeconomic Policy Framework for Africa's Structural Transformation

herausgegeben von: Carlos Lopes, Abdalla Hamdok, Adam Elhiraika

Verlag: Springer International Publishing

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

Einloggen, um Zugang zu erhalten

Über dieses Buch

The main objective of this book is to identify the key sources of growth which have played a significant role in Africa's recent robust growth as well as its efforts towards economic transformation. The book assesses to what extent the existing macroeconomic frameworks among African countries have been streamlined to the countries' development priorities in order to achieve long-term growth and economic transformation. Taking into account the diversity of African countries, the authors establish the economic linkages between relevant macroeconomic policy variables and the key sources of growth and development among the selected African economies, based on both theoretical and empirical underpinnings. Following this, an outline of a macroeconomic framework for Africa’s long-term growth and economic transformation is suggested.

Inhaltsverzeichnis

Frontmatter

1. An Overview of Structural Transformation and Macroeconomic Policy Imperatives in Africa

Abstract

Based on theory and empirical work, this chapter articulates the key issues examined in the book, focusing on the questions of what is meant by structural transformation, and how it should be measured in the context of Africa. The chapter underscores the critical importance of structural transformation for African countries to promote inclusive and sustainable development as enshrined in internationally agreed as well as regional development agendas. Key policy imperatives for transforming Africa’s economies are discussed including the role of the State, long-term development planning and macroeconomic policy frameworks that aim to simultaneously support the stabilization and development objectives of African economies. The following chapters provide a more detailed discussion and assessment of specific macroeconomic policies.

Carlos Lopes, Abdalla Hamdok, Adam Elhiraika

2. Africa’s Development Trajectory: Past, Present, and Future Directions

Abstract

The aim of this chapter is to take stock of the evolution of development thinking and policies in Africa since independence in the early 1960s, and to assess their success and shortcomings, and explore alternative pathways for Africa’s structural transformation and long-term growth in the context of rapid globalization and technological revolutions. Taking a retrospective view and prospective view, the chapter examines the internal and external factors that contributed to the demise of the African “nationalist project” of the 1960s, and in moving forward, it explores sound and feasible alternatives on how to harness Africa’s development potential in order to an inclusive development agenda.

Fantu Cheru

3. Pattern and Determinants of Structural Transformation in Africa

Abstract

This chapter models the evolution and determinants of shares of agricultural, manufacturing and services sectors’ value added for 53 African countries for 1970–2014. Several alternative estimation techniques were used including pooled Ordinary Least Square (OLS) with clustered standard errors, quantile regressions, panel data and three versions of a Generalized Method of moments (GMM) model. Two variants of the model were estimated – one with capital investment and the other with public investment as one of the determinants of sectoral shares. Quantile regressions do not provide much additional traction beyond OLS estimates and GMM results are not robust. There are large gaps in the data. Policy conclusions are derived from the viewpoint of increasing the shares of the services and, particularly, the manufacturing sector in value added.

Raghbendra Jha, Sadia Afrin

4. Fiscal Policy, Long-Term Growth and Structural Transformation in Africa

Abstract

Fiscal policy is an important macroeconomic policy tool that can be used to promote growth, equity objectives and structurally transform African economies. This can be done by raising the necessary revenue and making prudent and strategic long-term development-oriented expenditure interventions. Tax revenue-to-GDP ratio is increasing in the continent but needs to be enhanced via the reduction of the informal sector. Econometric analysis reveals the importance of reliable service provision by governments to enhance tax compliance. Further evidence is provided about the significant positive association between growth in Africa and government investment. Our findings suggest that policy measures focusing on investment and fair redistribution of growth gains provide better social inclusion, equitable spatial development and poverty reduction. Expanding the fiscal space is possible through the expansion of the existing tax base and improving the administrative and institutional efficiency of tax revenue collection.

George Kararach, Abbi M. Kedir, Eunice Ajambo, Heini Suominen

5. Monetary and Other Financial Policies for Africa’s Structural Transformation

Abstract

This chapter looks at the role of monetary policy in enhancing Africa’s structural transformation. It emphasizes for monetary policy to go beyond the basics of stability to implement monetary policy frameworks that better anchor inflation and promote macroeconomic stability as well as growth. This being the case, the chapter advocates for the implementation of strategies towards the implementation of frameworks that could create room for discretionary changes in monetary policy to accommodate shocks hitting the real economy, impacting on output and growth, hence the countries’ structural transformation. The chapter calls for some important policy insights to properly undertake exchange rate policies, taking into consideration potential trade-offs between inflation and exchange rate based on country-specific characteristics. It stresses the need for African countries to be cautious in accessing non-concessional debt (e.g. sovereign bonds) which might lead to unsustainable levels of debt. The chapter also recognizes that the absence of deep and efficient financial markets constrains Africa’s economic growth and transformation. Overall, ensuring central bank independence, effective management of inflationary pressures and improving policy coordination between monetary and fiscal policy would lead to better macroeconomic management in the continent and enhance its structural transformation process.

Hopestone Kayiska Chavula, Mamo Girma Tefera, Abbi M. Kedir, Yesuf M. Awel

6. Selected Sectoral Policies and Structural Transformation in Africa

Abstract

This chapter compliments the analysis in the previous chapters by examining the role of selected related sectoral policies, namely trade policy, agriculture policy and technology and innovation and how they impact structural transformation in Africa. Section 6.1 discusses the role of trade policy, focusing on the question of how to integrate trade and macroeconomic policies to ensure coherence in Africa’s structural transformation strategies. Following a discussion of the potential offered by trade policy, the section examines the channels of interaction between macroeconomic policy and trade policy and related African experiences. Section 6.2 discusses the role of macroeconomic policy in fostering sustainable agriculture for structural transformation, providing a brief assessment of the state of African agriculture and what is needed to transform this sector. The section concludes with a discussion of the institutional and macroeconomic policy landscape, necessary for promoting sustainable agriculture and structural transformation. Finally, Section 6.3 examines the role of technology and innovation in shaping policies for Africa’s structural transformation.

Souleymane Abdallah, Medhat El-Helepi, Victor Konde, Ottavia Pesce

7. Macroeconomic Policy and Pathways to Structural Transformation of African Economics

Abstract

There is a general consensus on the important position of macroeconomics in the debates associated with the development of poorer economies be it in Africa or the rest of the world. At the core of the debates on macroeconomic reforms in Africa – especially in the 1980s and 1990s – was the character of the state in these countries and its involvement in the macroeconomic policy making process. The nature of the engagement of these states very much reflects a range of configurations of socioeconomic and political forces that are ranged against it. As such the state is not per se neither irrelevant nor is it largely a source of economic inefficiency. The character of the politics, as of the economies, does influence policy outcome in these countries. It is imperative to jointly examine the character of the state and market in Africa when designing development policy. This is the true basis from which any macroeconomic policy decisions should be made rather than some theoretical framework espousing free markets which do not reflect reality.

Carlos Lopes, Abdalla Hamdok, Adam Elhiraika

Backmatter

Titel: Macroeconomic Policy Framework for Africa's Structural Transformation
herausgegeben von: Carlos Lopes
Abdalla Hamdok
Adam Elhiraika
Verlag: Springer International Publishing
Electronic ISBN: 978-3-319-51947-0
Print ISBN: 978-3-319-51946-3
DOI: https://doi.org/10.1007/978-3-319-51947-0