Africa is the poorest continent on earth. With 433 million people, about 36% percent of the population, living in poverty, there is an urgent need for African countries to develop. However, many countries on the continent have so far failed to achieve lasting economic growth. So, how can Africa improve its economy and lift its people out poverty?
1. Improve Infrastructure
The first way that Africa can improve its economy is by investing in infrastructure. Across the continent, roads, railways, electricity supply and airports are all in need of significant improvements. Infrastructure is key to a growing economy as it helps people move, connect, and run businesses effectively. If Africa’s economy is to grow, it’s infrastructure needs to improve.
Almost every country in Africa has under invested in its infrastructure. There are a lot of reasons for this, including political, geographical, and financial hurdles African countries must overcome. However, long-term sustainable economic growth is not possible until African countries improve their physical structure and facilities.
Many economists believe governments gain back significantly more when they invest in infrastructure. Africa must follow their advice if it is to improve its economy. It is even thought that infrastructure investment paid with debt is beneficial. African countries should prioritise investment in infrastructure with any debt they take on.
2. Provide More and Better Education
The second way that African countries can achieve better economic performances is by improving education. Currently, there are around 30 million children across sub-Saharan Africa who do not go to school. In addition, millions more attend only primary school and lack a secondary or higher education. Having an educated population is key to economic growth and this is something Africa needs to focus on.
There are many reasons why the quality of a countries education system is linked to its economic outcomes. High quality education that is accessible to all children leads to an educated workforce. This improves the economy by allowing business to recruit the skills they need, as well as breeding innovation and entrepreneurship.
Across Africa, serious investment is needed in education with the aim to get every child on the continent a secondary or university level education. If this can be achieved, the economies of African countries will soar.
3. Reduce Corruption
Corruption is endemic across Africa. Many African countries rank among the most corrupt in the world. A key way for Africa’s economy to grow is for government across the continent to effectively tackle corruption.
A countries economic performance can be massively held back by widespread corruption. Across Africa corruption is rife in government and business. Corruption harms a countries economic performance in many ways, including denying the government much needed tax revenue, making infrastructure projects more expensive and costing citizens more to interact with businesses and state agencies. High levels of corruption are also linked to a general distrust of the government.
African countries need to bring corruption under control if they are to improve their economies. Some countries on the continent have made inroads to reducing level of corruption, but if the economy of Africa is to grow, the levels of fraud, nepotism, theft, and dishonesty in many institutions needs to be constrained.
4. Focus on Innovation
Another way that Africa can improve its economy is through a focus on innovation. Technological, scientific, and engineering innovations all push an economy forward. Currently, most innovation takes place outside the continent but, if African countries are going to develop their economies, they will need home grown inventions.
Research and development is key to developing technological breakthroughs. African countries need to ensure they have the academic, business, and governmental intuitions in-place that promote entrepreneurship, risk taking, investment and creativity. If African nations are going to boost their economic performances with innovation, they need to create environments in which individuals and businesses can thrive.
For the continent of Africa, as a whole, to develop its economy, countries must rely less on outside technology, academic research and inventions. For Africa’s economy to improve, national governments must dedicate the resources and finances needed to ensure innovation is a focus across the continent.
5. Increase Foreign Investment
An important way that African countries can develop their economies is through encouraging foreign investment. Having wealth from around the world invested in African countries will grow their companies, increase productivity, introduce new working methods, and allow businesses to expand. Foreign investment is crucial if Africa’s economy is to improve.
Although inter-African investment – investment between one African state and another, will give a boost to the continent’s economy, securing foreign investment is vital for economic growth. This is because there is significant wealth outside of Africa that can further grow business on the continent. Many African enterprises need serious cash injections in order to grow and compete and these large sums of money need to come from abroad.
If African countries can create the conditions that encourage foreign investors to put their money into African markets, the economy of the continent will improve enormously.
6. Improve Government Efficiency
In order for the economy of Africa to accelerate there is an urgent need for governments across the continent to improve their efficiency. Effective governments are crucial to growing an economy and many African countries have governments that too cumbersome, inefficient, undirected, and poorly ran. Improving how many of the governments across Africa are ran will provide a significant boost to the economies of these nations.
There are several ways that inefficient governments hold back economic growth. These include the ineffective use of tax revenue, an inability to direct government investment where it is needed, and not being able to improve infrastructure as it is required. Inefficient governments are also often disliked by their citizens, which increases dis-trust as people begin to feel the government is not acting in their best interests.
Improving government efficiency is a vital way that Africa can improve its economy. Although some nations on the continent are making progress on developing more stream-lined, accountable, and effective governments, most countries in Africa need to radically improve how their governments are ran in their economies are going to grow.
7. Increase Trade
Another important thing that African countries need to do for the economy of the continent to grow is increase international trade. Rich economies are built on a foundation of global trade as countries exchange goods and services they develop for materials, finances, and products they need.
Currently, exports and imports to sub-Saharan Africa are almost of equivalent value. However, for the continents economy to develop, a focus should be placed on increasing trade with other countries. This is especially important because some African countries trade internationally significantly more than others.
Trade brings with it financial resources as well as giving businesses and consumers a wider range of products and services. African countries should focus on developing economies that encourage international trade, as well as building industries that produce items that other countries wish to buy. If Africa is to become rich, international trade will be vital.
8. Improve Accountability
Accountability and inclusivity are some of the most important factors in making a country rich. Accountability means governments and businesses are transparent, liable for their actions and answerable to the populations they work for. African countries, in general, lack accountability in their institutions and this holds their economies back.
A major way that Africa can improve its economy is by increasing the responsibility of its institutions. This can be done through improved democracy, but also though fair competition in markets, a limit on nepotism, reducing corruption, improving the rule of law, and encouraging a free media. All of these are crucial if African nations are going to develop.
Another key thing that African countries need to do to grow their economies is improve inclusivity. Economic inclusiveness means how easily new business can enter the market and individuals can start enterprises. Competition is foundational to creating a dynamic economy that responds to consumer demands. Africa needs to improve the freedom and fairness of its markets if it is to improve its economy.
9. Ensure Better Integration
The final way that Africa can improve its economy is by better integrating the nations of the continent. Allowing people, goods, services, and finances to move freely plays a vital role in economic growth. Removing barriers to trade, allowing people to move where jobs are and their skills are required, and allowing capital to flow easily are all going to be important if Africa is to become wealthy.
Another way that Africa needs to become better integrated is by improving connectivity. Africa lacks easy air connections between many of its key cities, as well as limited road and rail networks across the continent. There are also issues with many people needing visas to move between countries and controls on how money and goods move. All these barriers need to be reduced is Africa’s economy is to improve.
As well as creating a more interconnected continent, African nations also need to develop better systems of collective governance. The African Union has played a key role in bringing African nations together. However, it’s power is limited and there is resistance from some African countries against giving it more power. Better alignment and improved integration are crucial to Africa’s success and the African Union needs to be given more powers if the continent’s economy is truly going to soar.