CID Working Paper No. 34

The International Dimension of African Economic Growth*

Augustin Kwasi Fosu

January 2000

Abstract

The paper sheds light on the importance of the international dimension for African economic growth. While existing evidence points to a positive impact of openness on growth, the appropriate dynamics of the implications are yet to be captured. The beneficial effects of exports are confirmed for African economies, though available evidence suggests that it is the manufacturing component that seems to really matter for growth. International shocks in the form of terms of trade declines; economic instabilities of capital (investment) and imports; world interest rates; real exchange rate misalignment; and external debt all appear to exercise adverse implications for growth in Africa.

Keywords: international, Africa, growth

JEL codes: F4, O1

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*An earlier version of this paper, as a background paper for the Macro-Growth framework, was prepared for and presented at the Workshop on "Explaining African Economic Growth Performance," held at Harvard University, March 26-27, 1999. The workshop was sponsored by the African Economic Research Consortium and the Weatherhead Center for International Affairs

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