“What we’re seeing is that eight out of 12 countries that have recorded the highest growth rate in sub-Saharan Africa are actually non-resource countries. That contradicts the typical story that we hear, that growth in Africa is all about commodities,” IMF senior resident representative in South Africa Axel Schimmelpfenning told CNBC Africa.
“What we found is it’s a virtuous circle of many things coming together, and it starts with sound macroeconomic policies that provide stability and reduced volatility in the country and that provides confidence for investors.”
Structural reforms that centred on removing state control of the economy, liberalising markets and trade, and improving the business environment have also added to the prosperity of the Africa countries. Debt relief has also played a significant role in growth.
“On the fiscal side, aid and the debt relief meant that you could start spending on education, on health, on infrastructure, instead of on interest,” Schimmelpfenning explained.
Increased activity in agricultural productivity has also assisted in Africa’s overall growth story.
A number of African countries are however yet to invest in data, which is a crucial aspect of regional and international investment.
“If you want to talk about growth, you want to make sure that it’s real. Most of the work we do, we do with official statistics, but there are a lot of other data points available,” said Schimmelpfenning.
Examining Africa with a number of indicators allows researchers and investors a better sense of a country’s economic activity and the economic growth rate.
“What’s required is the right mix of things coming together in each individual country. I don’t think you can make a statement that would hold across all the countries. What we’ve seen is increased aid but also more predicable aid, where donors and governments sit down together and say this is what we want to achieve, these are our national objectives,” Schimmelpfenning added.