Published on Africa Can End Poverty

Domestic demand, net exports and Africa’s growth

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At the recent Africa Economic Conference, UN under-secretary general and executive secretary of UNECA, Abdoulie Janneh, said "[Africa’s] previous growth, while benefiting from improved macroeconomic management, was largely dependent on commodity exports and resources flows from outside the continent." 

Analysis done for the IMF’s Regional Economic Outlook  tells a somewhat different story. 

Decomposing Africa’s GDP growth into its two components, growth in domestic demand and growth in net exports (exports minus imports), they find that the lion’s share was due to domestic demand changes, and only a small portion to changes in net exports.  One reason for the latter could be that, as export earnings surged, African countries imported a lot, leaving the change in net exports (and hence their contribution to GDP growth) quite small.

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Shanta Devarajan

Teaching Professor of the Practice Chair, International Development Concentration, Georgetown University

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