Restarting and sustaining growth and development in Africa : a framework for improving productivity

Both the factors that undermine productivity and the opportunities for making major improvements in productivity are discussed. Factors undermining productivity and growth include civil disruption, fluctuating commodity prices, excessive foreign debt, a growing aid dependence that has undermined economic performance (and placed a limit on the efficiency of donor aid), over-taxation of agriculture, fiscal and monetary mismanagement, lack of accountability, spread of government intervention, the decline in investment, emergence of coping and other defensive strategies, the declining quality of labor, failure of management, lack of regional cooperation, and other influences, particularly the spread of HIV/AIDS. Potential ways to improve productivity are to augment the supply of inputs, particularly capital and labor, and increase output per unit of input through technological upgrading. The report reaches five main conclusions: (1) Macroeconomic stability and a predictable policy direction are essential to any attempt to sustain improvements in productivity. (2) Productivity improvements cannot persist without the generalized capital accumulation associated with broad-based improvements in health, education, food security, and institutions that sustain social stability. (3) A major stimulus to both productivity and growth in Africa could be achieved relatively rapidly through concentrated efforts to reduce waste and inefficiency. An obvious place to start is the government"s own operations. (4) A renewed focus is needed on improving management at all levels. A useful start has been made by liberalizing markets and opening African economies to competition. (5) Major sustained improvements in productivity would occur across Africa if governments began emphasizing the large untapped agriculture sector. Includes references.