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State-business relations and African growth: reason for optimism?

Written by Dirk Willem te Velde

Africa is growing fast, but why is that so? Whilst Europe is scheduled to grow less than 2 per cent this year and next, the sub-Saharan African economy is scheduled to grow at more than double that rate, at more than 5 per cent a year. Some argue that current growth prospects in Africa have been inflated by rising commodity prices and the booming trade and investment links between Africa and emerging markets, notably China. However, to be clear, African growth prospects had already turned the corner in the mid 1990s, long before the recent upturn in commodity prices and growth spurt in emerging markets. Instead, research co-ordinated by ODI and IPPG on Effective state-business relations [SBRs], industrial policy and economic growth, suggests that improved institutions have helped African countries to grow, highlighting in particular the nature and scope of state-business relations.