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An Overview of Structural Transformation and Macroeconomic Policy Imperatives in Africa

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Macroeconomic Policy Framework for Africa's Structural Transformation

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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.

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Notes

  1. 1.

    The definition of sustained economic growth adopted by the Commission on Growth and Development (2008) is a real GDP growth rate of 7 per cent a year or more for 25 years or longer.

  2. 2.

    See for example Martins (2015); Yilmaz (2015); ACET (2014); McMillan and Rodrik (2011); McMillan et al. (2014); McMillan and Headey (2014); De Vries et al. (2015); ECA and AUC (2011a); ECA and AUC (2013); AfDB et al. (2013).

  3. 3.

    See for example, Chenery and Syrquin (1975); Kruger (2008); Norris et al. (2013); Alvarez-Cuadrado et al. (2015); Herrendorf et al. (2014); Landon-Lane and Robertson (2003); Bassanini and Scarpetta (2001), and Acemoglu and Guerrieri (2008).

  4. 4.

    As noted by Acemoglu et al. (2005), before their separation in 1948, North and South Korea had been one country with same institutions. However, following their separation, both have been established along different institutional set-ups. While North Korea evolved as a communist state (along the Russian and Chinese model) and abolished private property of land and capital, South Korea preferred a free market economy, with strong support to private ownership of land and capital. Given their commonalities in culture and geography, the current different level of development in these countries is attributed to the differences in institutions.

  5. 5.

    Japan is in the first generation of East Asian countries of a “developmental State”, while South Korea, Taiwan, and Singapore are in the second generation.

  6. 6.

    Mauritius, for example was able to sustain annual growth rates close to 5 per cent for about four decades starting from 1970, with agriculture’s share declining from approximately 24 per cent of GDP to less than 4 per cent and services increasing from 51 per cent to almost 70 per cent during the same period. This successful economic transformation is attributed to government policies that have provided a conducive environment for the private sector. The restructuring of the economy, including reform programmes to reduce export taxes, also contributed to the transformation. Social progress has also been a remarkable achievement in Mauritius (Rodrik 2013).

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Authors and Affiliations

  1. United Nations Economic Commission for Africa, Addis Ababa, Ethiopia

    Carlos Lopes

  2. United Nations Economic Commission for Africa, Addis Ababa, Ethiopia

    Abdalla Hamdok

  3. United Nations Economic Commission for Africa, Addis Ababa, Ethiopia

    Adam Elhiraika

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  1. Carlos Lopes
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  2. Abdalla Hamdok
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  3. Adam Elhiraika
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Correspondence to Carlos Lopes .

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Editors and Affiliations

  1. United Nations Economic Commission for Africa, Addis Ababa, Ethiopia

    Carlos Lopes

  2. United Nations Economic Commission for Africa, Addis Ababa, Ethiopia

    Abdalla Hamdok

  3. United Nations Economic Commission for Africa, Addis Ababa, Ethiopia

    Adam Elhiraika

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Lopes, C., Hamdok, A., Elhiraika, A. (2017). An Overview of Structural Transformation and Macroeconomic Policy Imperatives in Africa. In: Lopes, C., Hamdok, A., Elhiraika, A. (eds) Macroeconomic Policy Framework for Africa's Structural Transformation. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-51947-0_1

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  • DOI: https://doi.org/10.1007/978-3-319-51947-0_1

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