1 Towards a Growth Strategy for Africa

Now that China and India have found ways of growing out of poverty, attention has again turned to Africa. The purpose of this report is to ask which engines of growth can be activated in sub-Saharan Africa today. After two decades of stagnation in the continent, discouragement is taking hold. The focus of policy has shifted further and further away from growth-oriented interventions towards welfare assistance. Yet, in the long-run, a growth strategy is the most cost-effective way of dealing with poverty. This is true for two fundamental reasons: first, growth lifts many of the poor out of poverty; second, it generates the government revenues necessary for anti-poverty measures. A donor strategy that focuses exclusively on short-term poverty alleviation is a dead end, condemned to last indefinitely. Rapid growth, when it happens, is disruptive. Measures are needed to protect vulnerable groups against disruption. In a growing economy, educating the poor is a good way of helping them partake to increased aggregate prosperity. In a stagnating economy, the net effect on poverty reduction is less clear. The rapid increase in education which occurred in sub-Saharan Africa from 1960 to 1990 was not sufficient to generate growth