Africa Department

Economic Policy

Image: Blumenfarm Kenia of FES/E. Bollrich

The state and economic growth

It sounds paradoxical, but: Sub-Saharan Africa is on the one hand one of the poorest regions in the world, while on the other some African countries have the fastest-growing economies in the world. Studies on Europe and East Asia show that the state plays a major role in the design and promotion of a self-sustaining growth process. To what extent African states, which are often described as "weak", are able to perform this task and what sociopolitical preconditions have to be met for this are key questions in the economic policy work line.

Structural transformation and industrial policy

Economic growth is not an end to itself. This is obvious especially in the countries of Sub-Saharan Africa that display significant disparities in income and in which the majority of the population continues to live in extreme poverty. The economic growth required therefore has to create as many jobs as possible at all levels of training and qualification. In many countries of the continent, current growth is based solely on the export of natural resources, however, contributing little to the reduction of poverty and inequality. That is why African economic systems need to undergo structural transformation: its scarcely diversified, primarily agricultural, economies have to be transformed - in the direction of a sustainable agriculture including more processed agricultural goods, manufacturing and services.

Such structural transformation requires the state to pursue an active economic and industrial policy. The key challenge at the same time is to achieve a balance between urgently needed economic growth and inclusive development with ecological sustainability. Actors such as parliaments, civil society organisations and researchers must be included in internal societal processes seeking solutions in order to ensure that democratic principles underlie these processes.