Key Points:
- Africa’s economic future is a key question for anybody thinking about the continent- whether it will be one of plunder or prosperity to a large extent depends on the role the private sector gets to play in it. Professor Paul Collier, from Oxford University, made this argument during a speech at a dinner hosted by CDE in June 2013.
- Collier argued that besides natural resources, Africa has two other sources of potential growth that could raise growth above 5%- manufacturing and leap-frogging technologies and rapidly increasing productivity.
- While the principal social benefit that business provides lies in jobs created and taxes paid, businesses’ biggest asset is that they are effective organisations —that they know how to run things— much better than the government.
- Thus, Collier argued that Africa could grow rapidly in the next few decades, but that this would happen only if effective organisations emerge and if the governance of extractive industries was improved.
- In this regard, an important wildcard for sub-Saharan Africa is whether it is able to break into global manufacturing. A third potential source of growth could come from leap-frogging
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