Services and Economic Development in Africa: An Overview
a African Economic Research Consortium, Nairobi, Kenya
b Graduate School of Business Administration, University of Witwatersrand, 2 St David's Place, Parktown, Johannesburg, South Africa
c Collaborative Research, African Economic Research Consortium, Nairobi, Kenya
* Corresponding author: Professor of Economics and Director of Research, African Economic Research Consortium, Nairobi, Kenya. E-mail: olu.ajakaiye{at}aercafrica.org
Most sub-Saharan African (SSA) countries have been recording considerable growth since the beginning of this century compared to the dismal and unstable growth experience of the 1980s and 1990s. In 2004, for instance, sub-Saharan Africa recorded a per capital gdp growth rate of about 2.6% but the quality of life of the majority remain dismal as the 2004 HDI for SSA was 0.472, the lowest among the regions of the world. Also, the economies of SSA countries have structural weaknesses of the economies as evidenced by declining contributions of agriculture, manufacturing and other industrial sectors while that of services sector increased. Typically, economies dominated by high service industries tend to be knowledge intensive. However, SSA countries have low knowledge economy index (KEI) even though their economies are dominated by service industries as evidenced by the fact that in 2006, only South African had a middle range KEI of 5.19. The remaining 26 SSA countries have low KEI. These stylized facts raise doubts about the relationship between services and economic development in Africa. Accordingly, this volume explores the relationship between financial, infrastructural and social services and economic development in Africa. It is hoped that the findings and policy recommendations contained in this volume will provide useful guide to policy makers and illuminate areas of further investigations by researchers.
JEL classification: O14