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Macroeconomics and Economic Growth

Making the most of Africa’s growth momentum

Punam Chuhan-Pole's picture

Co-authored with Luc Christiaensen and Aly Sanoh

For a decade and a half now, Africa has been growing robustly, and the region’s economic prospects remain good. In per capita terms, GDP has expanded at 2.4 percent per year, good for an average increase in GDP per capita of 50 percent since 1996.

But the averages also hide a substantial degree of variation.  For example, GDP per capita in resource-rich countries grew 2.2 times faster during 1996-2011 than in resource-poor countries (Figure 1).  Though not the only factor explaining improved performance—fast growth has also been recorded in a number of resource-poor countries such as Rwanda, Ethiopia and Mozambique (before its resource discoveries)—buoyant commodity prices and the expansion of mineral resource exploitation have undoubtedly played  an important role in spurring growth in several of Africa’s countries. Even more, with only an expected 4 or 5 countries on the African continent without mineral exploitation by 2020, they will continue to do so in the future. Yet, despite the better growth performance, poverty declined substantially less in resource-rich countries.

Can Tanzania achieve its Green Revolution?

Jacques Morisset's picture

Let's think together: Every Sunday the World Bank in Tanzania in collaboration with The Citizen wants to stimulate your thinking by sharing data from recent official surveys in Tanzania and ask you a few questions.

Agriculture is the mainstay of Tanzania’s rural economy and the livelihood of most of the country’s poor. As a result, rural incomes and poverty reduction are closely linked to agricultural productivity. Yet, according to FAO, yields for important staple crops in Tanzania remain very low:
- With a maize yield of 1.3 metric tons per hectare (mt/ha) in 2011, Tanzania ranks behind Kenya and Ghana (1.6 mt/ha); and way behind Vietnam (4.3 mt/ha) or China (5.7 mt/ha).
- A similar pattern holds for rice (paddy), with Tanzania’s yield of 2.0 mt/ha in 2011 being comparable to only about half of Kenya’s (4.0 mt/ha), and less than one third of China’s (6.7 mt/ha) in that year.
- It is noteworthy too that there has been no general upward trend in yields over the past two decades, though there is considerable annual variation due to rainfall patterns.

2030: Global shifts and Kenya's transformation

Wolfgang Fengler's picture

What will the world look like in 2030? Clearly, it will be very different from today and some of these changes can already be anticipated. Most of us can remember the year 1996 which is as far back in the past as 2030 is forward in the future. Today’s emerging trends will shape the world over the next two decades.

Every five years, the US’s National Intelligence Council publishes its analysis of “Global Trends”. This time, the analysis looks forward to 2030 and highlights four “megatrends” all of which will probably feel quite intuitive to people living in Africa.

Is Tanzania’s economic growth an urban phenomenon?

Jacques Morisset's picture

Tanzania has been growing steadily over the past ten years and 2012 was no different. The economy expanded by 6.9 percent, which is close to the historical average. A look at national accounts reveals that five sectors contributed to almost 60 per cent of Tanzania’s economic growth between 2008 and 2012:

- Communication GDP almost doubled in less than four years, growing on average by over 20 per cent per year.
- Banking and financial services have expanded by 11 per cent per year since 2008.
- Retail trade increased by almost 40 percent between 2008 and 2012.
- Construction surged by an average of 9 percent per year over the same period.
- Manufacturing grew annually by 8.4 percent during the last four years.

Is Tanzania strong enough to resist temptation?

Jacques Morisset's picture

Speaking about the often unruly behavior of his talented young players, Arsene Wenger, the famous Arsenal coach, said: "Some are wrong because they are not strong enough to fight temptation and some are wrong because they don't know."

Youth in Tanzania: a growing uneducated labor force

Jacques Morisset's picture

Let's think together: Every Sunday the World Bank in Tanzania in collaboration with The Citizen wants to stimulate your thinking by sharing data from recent official surveys in Tanzania and ask you a few questions.

"The youth of today are the leaders of tomorrow", so the old adage goes. All countries, including Tanzania, need to invest in and build a strong, healthy, well educated, dynamic and innovative youth.  In Africa, the number of youths (aged 14 to 25 years) have grown significantly  over the past decades, contributing to the bulk of the labor force.

Will Rising Temperatures Derail Africa’s Rise?

Tom Bundervoet's picture

Africa is on the move. After two decades of decline, fortunes reversed by the end of the 1990s, resulting in a decade of strong economic growth and sizable improvements in sanitation, education and health. Real incomes per capita in Sub-Saharan Africa grew by more than 30 percent over the last ten years, and six countries from the continent made it on the list of the ten fastest-growing economies in the world. Big men, although still around in some parts of the continent, have become less common, elections have become more frequent, and many civil wars have finally ended. All this has produced a narrative of “Africa Rising” and a widespread optimism that Africa is finally on the right track. Indeed, the 21st century may well turn out to be Africa’s century.

Or not. Ted Miguel’s keynote address at the annual conference of the Center for the Study of African Economies (CSAE) in Oxford highlighted a potentially important concern. Applying a common statistical framework to a large number of studies on the link between temperatures and human violence, Miguel and his co-authors find a remarkably consistent and strong correlation between exceptionally high temperatures and manifestations of violence. Drawing on detailed data from a variety of countries and studies, they show that exceptionally high temperatures are correlated with significant increases in witch killings (Tanzania), rapes (USA), murders (USA), aggressive behavior of baseball players (USA) and more frequent and more aggressive horn-honking.

To succeed, Kenya only needs to look within

Wolfgang Fengler's picture

“So how are you enjoying living in paradise?” Michael Geerts, the former German ambassador to Kenya asked me the other day.   He was posted in Nairobi during the difficult years in the end of the 1990s, and continues to stay in touch with a country he loves dearly. Many colleagues, who once worked in Kenya have bought houses in Nairobi, and plan to retire in the “city under the sun”. But not everybody shares their passion and faith in the country’s future. There are many pessimists who feel that the country is moving in the wrong direction. Kenya, they say, will never rid itself from grand corruption, and crime such as drug trafficking will continue to flourish.
 
Are they seeing the same country? Maybe both perspectives are right, because Kenya is a country of extremes.

A well-kept secret: Tanzania’s export performance

Jacques Morisset's picture

Let's think together: Every Sunday the World Bank in Tanzania in collaboration with The Citizen wants to stimulate your thinking by sharing data from recent official surveys in Tanzania and ask you a few questions.

Outward looking strategies have been used by most countries that have succeeded in their transition toward emergence. East Asian tigers and dragons have witnessed a tremendous and sustained boom in their exports, as have emerging countries like Chile, Tunisia, Botswana, and Mauritius. Even fast-growing ‘big’ countries such as Brazil and China have relied on world markets.

What might surprise some though is that Tanzania’s export performance in fact exceeded that of Brazil, Tunisia, Mauritius, Malaysia, Korea, and Thailand between 2000 and 2012. Among countries that did better were China and Uganda.

Uganda: Invest at home to promote a deeper regional market

Rachel K. Sebudde's picture

“Uganda might lose the market in South Sudan, if deliberate efforts aren’t put in place to sustain it”, said Uganda Investment Authority Chairman, Patrick Bitature during a hard-talk discussion at the February 14th launch of the Uganda Economic Update – Bridges across Borders: Unleashing Uganda’s Regional Trade Potential.
Bitature argued that Uganda’s supplying of South Sudan was more circumstantial than strategic.
 
“Food items like rice, matooke [green bananas], maize and sorghum that Uganda is exporting to South Sudan will soon be grown there, once stability returns. Uganda instead needs to add value to these exports”, he said.

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