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Enhancing Africa's Global Competitiveness through Economic Governance
Africa would seem to have a unique opportunity to attract foreign direct investment (FDI) and hence to build its international competitiveness by the investment uncertainties created by the needs for the US and EU to solve their particular economic problems. This was a theme running through the deliberations of the plenary session.

African Reforms are essential to Boost Private-sector Development and Improve Governance
The capacity of smoothing shocks highly depends on the ability of African policy makers to diversify their economies. Boosting the private sector and improving economic and political governance are crucial.
5.2 Africa’s diversification regimes revisited: Economic Report on Africa 2007
A further link to productivity
4.2 Diversification regimes in Africa: Economic Report on Africa 2007
Analysing the various diversification indices and the structure of the top ten export commodities for selected countries over the last two decades and a half provides some useful insights which can be used to define diversification regimes that characterize Africa. Five diversification regimes can be identified from Africa’s experience (see Ben Hammouda et al. 2006b). These regimes should not be viewed as steps or as a continuum that a country must follow as it moves from a concentrated to a diversified economy. Rather, the regimes are a result of the policy actions that a country has set in place over a given period of time. The particular regime that a country falls into is likely to be the result of a mix among the various diversification determinants.

4.1 Case studies on export diversification for selected African countries: Economic Report on Africa 2007
So far, diversification trends in relation to African economies indicate that different countries have achieved varying results. The overall conclusion is that, in general, African economies have failed to make gains beyond their initial positions in the early 1980s. It has also been pointed out that they reacted defensively to the crises that beset them in the 1980s. Their macroeconomic stabilization policies did not create an environment conducive for dynamic response, as a good number of countries in Asia and Latin America were able to do. Their defensive response as seen in the oil factor, perpetuated the status quo and worsened it in some instances. Earlier gains in such countries as Gabon, Nigeria and Sudan were eroded.
4.1 Diversification trends at the subregional level: Economic Report on Africa 2007
The general picture of the continental performance that was shown in figure 4.1 masks the gains and losses made at the subregional and country levels. Figure 4.3 gives the situation at the subregional level and it compares five subregions defined around some of the RECs. In 1980, the most diversified subregions were COMESA and ECOWAS. The least diversified was CEMAC with SADC and North Africa in between. By 2002, the diversification gains at the subregional level had changed, with the most significant gains made by SADC, which is now the most diversified subregion on the continent. It is followed by COMESA and North Africa. CEMAC has remained the least diversified subregion.
4.1 Diversification trends at the regional level: Economic Report on Africa 2007
Figure 4.1 shows three different measures of diversification for African economies as a whole (see Ben Hammouda et al. (2006a) for detailed definition of the indices of diversification). Three concise comments on the general trend of Africa’s diversification experience can be made.
Overview IX: Economic Report on Africa 2007
Policies to increase diversification
Overview VII: Economic Report on Africa 2007
Diversification as a key pillar in Africa’s development efforts
Overview II: Economic Report on Africa 2007
Growth in Africa has increased but it is still not enough

Other economic diversification Related Articles

4.0 Diversification trends in Africa: Economic Report on Africa 2007
The diversification of African economies is one way through which the recent economic growth achievements could be sustained. Africa’s economic transformation can be achieved through both horizontal and vertical diversification. In addition, such diversification will help to build competitive economies that can productively be integrated into the global economy. Diversification is therefore a pre-condition if Africa is to register accelerated development. The scaling-up of current real growth to desired levels and in a broad manner can also be sustained if there is deepening in the diversification of African economies.
4.1 Diversification trends at the regional level: Economic Report on Africa 2007
Figure 4.1 shows three different measures of diversification for African economies as a whole (see Ben Hammouda et al. (2006a) for detailed definition of the indices of diversification). Three concise comments on the general trend of Africa’s diversification experience can be made.
4.2 Diversification regimes in Africa: Economic Report on Africa 2007
Analysing the various diversification indices and the structure of the top ten export commodities for selected countries over the last two decades and a half provides some useful insights which can be used to define diversification regimes that characterize Africa. Five diversification regimes can be identified from Africa’s experience (see Ben Hammouda et al. 2006b). These regimes should not be viewed as steps or as a continuum that a country must follow as it moves from a concentrated to a diversified economy. Rather, the regimes are a result of the policy actions that a country has set in place over a given period of time. The particular regime that a country falls into is likely to be the result of a mix among the various diversification determinants.

5.1 Determinants of diversification in Africa: Economic Report on Africa 2007
Diversification and policy variables constitute a two-way process in that diversification not only influences policy outcomes, but is itself influenced by policy variables. This proposition naturally leads to the search for those economic and non-economic policy actions that are likely to affect the level and rate of diversification in a country. What evidence is there that links economic and non-economic variables with national capacity to diversify?
5.1 Investment is vital for an economy to diversify: Economic Report on Africa 2007
The inverse relationship between investment and the diversification index shown in table A5.1 indicates that as the level of investments increases, there is a tendency for economies to become more diversified. The smaller the diversification index gets, the more diversified an economy becomes, and vice-versa for specialization. Unless a country commits a sufficient portion of its national income to building capital stock, it is unlikely to be able to diversify. Investment as measured by gross fixed capital formation turns out to be a key determinant to Africa’s diversification results.
5.1 Fiscal space is critical for diversification: Economic Report on Africa 2007
The positive but insignificant result for the impact of fiscal balance on diversification shows that macro stability plays a role for the success of diversification efforts. At the same time, a proactive fiscal policy, especially in terms of promoting public investment, can support efforts towards diversification.
5.1 The results vary by diversification regime: Economic Report on Africa 2007
At this point, it is worthwhile to recall the five diversification regimes: those countries with little diversification; countries that started but got stuck in the diversification process; those with deepened diversification; backsliders in diversification; and the conflict and post-conflict countries. This report suggests that belonging to a particular regime has more to do with policy and institutional factors at the country level. Consequently, there are different determinants when the discussion is brought to the country level (see table A5.2 for correlation results).
5.2 Diversification-deepening policies raise growth and TFP: Economic Report on Africa 2007
What then do these results imply? They mean that pursuing diversification-deepening policies could help accelerate growth. Important policy implications of this link arise with respect to the determinants of diversification that were discussed earlier in the chapter.
6.4 Industrialization policies key to deepened diversification: Economic Report on Africa 2007
With regard to industrial policies, it helps to recall that economic transformation is both a necessary and sufficient condition for industrialization. However, economic transformation cannot occur in the absence of diversification.
6.5 Financing research to increase TFP: Economic Report on Africa 2007
The other major area in which new economic policies for diversification are required is in research. The majority of African countries, since the demise of diversification gain resorted to relying on factor accumulation as the main source of economic growth.
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