A2 Macroeconomics: GDP growth in Africa

This video provides an introduction to the conditions under which Africa is seeking to develop. It features Shanta Devarajan. As the World Bank's Chief Economist for Africa, he is the acknowledged expert on the subject.

Africa's policymakers were able to pursue prudent macroeconomic policies prior to the 2008 world economic crisis, when GDP growth averaged 5-6% - nearly the rate of India's growth. Last year growth fell to 1%, but it has since resumed thanks to reform. Prior to 2008, poverty was being reduced at a faster rate than India's.

However, the continent has suffered threefold: from the financial, the food and the fuel crises. The rate of private investment, at 15% of GDP, is too low - half the rate of Asia's. Public sector workers are inefficient or lazy, and money goes astray suggesting corruption. Infrastructure is also lacking. Shanta argues that poor governance - often coupled with conflict - is at the root. The solution, he argues, lies in encouraging the private sector "microbusinesses", making government agencies more accountable, and better cooperation and division of labour amongst neighbouring regions. A brilliant introduction to the limits of growth and development.

Renewing the World Bank's Strategy for Africa, World Bank Chief Economist for Africa Shanta Devarajan from World Bank on Vimeo.