Diversification in Africa in a macroeconomic perspective

This paper contrasts the poor performance of African economies over the past 30 years with the remarkable development of East Asian newly industrialized countries. It provides evidence that the lack of diversification, stemming from the adoption of inward-looking strategies, interventionist policies, and the absence of a competitive environment, is at the root of the lagging development of African countries. Sound macroeconomic policies and structural reforms to foster capital and labor mobility, as well as trade liberalization are a prerequisite to enhance the economic growth potential of African countries.