The world economy grew by 3.6 per cent in 2010 up from -2.1 per cent in 2009, but its growth is expected to moderate to 3.1 per cent in 2011. Africa’s rebound strengthened from the GDP growth rate of 2.4 per cent in 2009 to 4.7 per cent in 2010 and a forecast of 5 per cent for 2011. The recovery in Africa was underpinned by a number of factors, including the rebound of export demand and commodity prices; increased inflows of foreign direct investment in extractive industries and aid; return of tourism; investment in infrastructure associated with the countercyclical policies adopted by many African countries; increased activities in the service and especially telecommunication sectors; increased consumer demand; and good harvests in some subregions.
Despite progress in some countries, African economies are still characterized by heavy reliance on the primary commodity sector, high vulnerability to external shocks, jobless growth and slow progress towards social development goals. It is essential for African countries to promote economic diversification and structural transformation as a means to accelerate and sustain broad-based and shared high employment-generating growth. Failure of earlier state-led and market-driven approaches to promoting economic transformation points to the need for African developmental states that use the market as an instrument rather than as a sole “mechanism” for fostering long-term investment, rapid and sustained economic growth, equity and social development, in the context of inclusive, transparent and comprehensive national development frameworks.