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Africa’s Shifting Economic Paradigm

The economic and political shocks of the past few years have undermined the “Africa rising” narrative that accompanied the continent’s export-led growth strategy. African countries must adopt a new strategy that relies on demand-driven growth, capitalizing on the continent’s fast-growing population.

ALGIERS – Before the outbreak of COVID-19, Africa experienced 25 years of uninterrupted economic expansion, prompting analysts to proclaim that the continent’s growth momentum was no longer dependent on its extractive industries. As access to education and health care increased, so did life expectancy, nurturing an “Africa rising” narrative. To finance their development needs, African countries turned to international capital markets, many of them for the first time.

A close examination of the data, however, reveals that Africa’s economic growth has not been broadly shared. Per capita growth, in particular, has been far less impressive than it initially seemed. Poverty remains endemic across the continent, with roughly 431 million people in extreme poverty (living on less than $1.90 per day). Without decisive action, the United Nations estimates that an additional 60 million Africans will fall into extreme poverty by 2030.

Moreover, the inefficient delivery of public services like education and health care has led to widespread dissatisfaction. The ambitions of the continent’s increasingly educated young people, in particular, seem to have outpaced actual material progress. Despite significant efforts to increase availability, half of Africa’s population still lacks access to electricity. Consequently, millions of Africans have migrated in recent decades in pursuit of better opportunities.