To date, the African economy has largely been overshadowed by Asia in the East and to a lesser extent, Latin America in the West. However, hidden in plain sight, Africa has begun to emerge as one of the world’s fastest growing economic regions. Many global investors still shy away from Africa, retaining the continent’s outdated image of war, corruption, political instability, financial chaos and poverty and suffering. However, leading financial consulting firms McKinsey Global Institute (MGI) and Boston Consulting Group (BCG) agree that Africa is now the most profitable place to invest. This discussion paper provides an overview of the MGI and BCG reports detailing Africa’s economic growth over the last decade. The rationale behind Africa’s economic success and suggestions for sustaining its impressive performance are also included. 

In June 2010, Liberia become the 29th country in the world to have all its external debt cancelled through the Heavily Indebted Poor Countries (HIPC) initiative. Liberia has secured nearly US$ 5 billion in irrevocable debt relief from the World Bank (WB), International Monetary Fund (IMF), African Development Bank (AfDB) and bilateral creditors. As more and more commentators discount foreign aid as a solution to widespread poverty and underdevelopment, debt relief has begun to receive increased attention internationally as an alternative to aid. This article will look at the general tenets of the debt relief agendas of the HIPC, their objectives and working mechanisms. Secondly, the paper will look at the case study of Liberia and give projections of the possible outcomes of this debt relief and its implications on Liberia’s economic future.

In July 2010, the World Bank launched its second Kenya Economic Update, which details the country’s strong recovery in 2010 after the economic shocks of the previous two years, while identifying the weak link in the economy, namely exports. Economic growth in Kenya, East Africa’s biggest economy, is set to accelerate over the next two years as increased rainfall boosts farm output and stable power supplies help the manufacturing industry. However, failure to address the issue of declining exports may mitigate the momentum and contribute to the economy’s stagnation. This discussion paper outlines the effects of the economic shocks on growth. In addition, a cursory glance at the World Bank’s analysis of the Kenyan economy in 2010, as well as the International Monetary Fund’s (IMF) suggestions for sustained growth in the future is taken.

On 24 May, the 2010 edition of the African Economic Outlook (AEO) was launched in Abidjan, Côte d'Ivoire. The AEO conducted a country-by-country analysis, covering the economic, social and political development of fifty of the continent’s countries, excluding Eritrea, Somalia and Zimbabwe. It was jointly published by the African Development Bank (AfDB), the Organisation for Economic Cooperation and Development (OECD) and the United Nations Economic Commission for Africa (UNECA), with financial support from the European Commission (EC) and the Committee of African, Caribbean and Pacific Group of States (ACP). The publication was disseminated worldwide with a series of conferences in Africa, Europe, America, and will later be circulated in the Middle East and Asia.

As policy makers, financial regulators and private financial institutions reflect on the repercussions of the global financial crisis, renewed attention is being paid to financial stability. There is a close relationship between financial stability, instability and macroeconomic performance. Financial instability can have significant negative impacts on macroeconomic stability as well as on long term economic growth. Economic stability requires policy makers to pay careful attention to financial stability,(2) as was evident during the financial crisis when financial system instability wreaked havoc with the global economy. Unemployment sky-rocketed as GDP growth stalled and dropped into negative territory and output from all sectors contracted dramatically on the back of decreased consumer spending.