Africa is seeing it’s lowest growth rates in 20 years at a time in which rapid technology change is driving economic inequality globally. Abebe Selassie, head of the International Monetary Fund’s Africa Department lays out what African countries need to do restart growth across the region:
Countries that are experiencing economic imbalances like Ghana and Nigeria should strengthen their tax revenue generation, prioritize spending projects, and increase exchange rate flexibility.
Countries that are doing pretty well right now like Ivory Coast and Senegal should avoid increasing public debt and increase their tax revenue generation to put toward development spending.
Across the board, Abebe calls for African countries to implement policies that encourage investment and diversification. They should also facilitate technology adoption and push for greater integration within the global economic system.
In today’s environment of rapid technology changes, increased protectionism among emerging and developed economies, implementing these policy prescriptions is no simple feat. Further, Dr. Moyo has outlined above the political challenges of taking long-term policy positions. Here’s where taking an L for the long term health of a country could be a good move.