The outlook for the African economy

The most important characteristics of the African economy are: The prospect of considerable population growth and its young population; Seemingly strong g rowth but which masks weak productivity gains. This can be attributed to an infrastructure shortfall and education problems, despite the progress made. Accordingly, per capita living standards are hardly rising; Unbalanced growth, due to a chronic external deficit despite commodity exports and, due to the accumulation of external debt, chronic exchange rate depreciation, i.e. a continuous deterioration in the terms of trade; This results from underinvestment, linked to a savings shortfall , leading to the under - accumulation of capital in infrastructure and industry, under - industrialisation and the inability to process commodities in Africa . In the absence of more financing for productivity-enhancing investment in Africa, whether of domestic or foreign origin, the risk is clear: a burgeoning population with very low living standards, endlessly mounting external debt and impoverishment via exchange rate depreciation.