Regional Focus: Africa

 

Despite decades of significant foreign aid inflows and numerous initiatives to spur Africa’s development, the success remains muted at best. The continent still faces high levels of poverty and unemployment, rampant corruption, and centralization of power in the hands of the executive. Overregulation impedes growth, and barriers to starting a business push entrepreneurs into the informal sector, which dominates most economies. All these factors hinder the advancement of democratic and market-oriented institutions.

 

On the positive side, several states have seen democratic openings in recent years, the overall number of conflicts has declined, and governments are increasingly implementing market-oriented policies to boost economic growth. At the same time, the eruption of violence in Kenya underscored that even in countries where democratic and market reforms have been initiated, they are yet to take root and remain fragile.

 

The challenge for Africa is to move beyond basic reforms to fundamentally change its institutions toward democratic freedom and private sector-led growth. In order to accomplish that, governments must adopt effective checks and balances and become more responsive to their citizens. Ultimately, Africa’s path toward prosperity must lead through better governance, strengthened rule of law, and more transparent and accountable institutions. The need for more economic freedom to accompany democratic changes also remains paramount if the continent is to move beyond its current predicament of a severely stunted economic performance.