Drivers of long-term growth? Assessing the impacts of emerging countries on Sub-Saharan African economies

After the 'lost decades' Sub-Saharan African economies have exhibited positive growth rates, which has led donors to conclude that, thanks to emerging countries, stagnation is now a thing of the past. The paper shows the complexity of causalities and imbalances: these depend on: i) channels (trade, investment); ii) the emerging country (China having by far the strongest impact); and iii) African countries' market structures. On the one hand, this growth relies on structural asymmetries. It is generated by the distorted commodity-based export structures of African economies and falls if international prices decline, which necessarily occurs due to the inherent volatility of prices. High prices are moreover driven by the growth of emerging countries: the growth of African economies depends on factors that are external to them and will decelerate if demand in emerging countries decelerates. This growth increases the specialisation of African economies in commodities, while emerging countries consolidate their comparative advantage in manufacturing and threaten nascent African industrial sectors. As industrialisation is a key determinant of long-term growth, emerging countries may, in the long-term, erode their short-term positive impact on African economies. Asymmetries also stem from the attractive trade and investment policies African countries offer. On the other hand, emerging countries have positive impacts, via their investments in infrastructure, which fosters industrialisation and the spillover effects of investments in commodity sectors. Asymmetries are dynamic processes and depend on the specificities of African countries - economic structures, geopolitical importance, political economy -, and the strategic policies of emerging economies