Limited access to finance is a major obstacle to development of SMEs in Africa as their inherent higher perceived risk makes financial institutions reluctant to lend to them and adequate financial instruments lack.

Private business activity, by creating and using “ideas”, drives economic growth in both rich and poor countries. Creating an enabling business environment is necessary but not sufficient for fostering the private sector in poor countries. Open dialogue, transparency, accountability and...

Limited capacity to pay, large infrastructure needs and a huge backlog in the construction of sanitation facilities make recourse to cross-subsidies and government-funded subsidies a necessity in Africa. * This Policy Insights introduces the African Economic Outlook 2007.

Technological change and organisational advancements have made possible the greater participation of developing country producers in international trade, in a wide range of goods and services. However, firms based in industrial countries often determine the scope for insertion and upgrading of...

Africa’s economic progress now seems on a firm footing after a third straight year of satisfactory performance in 2005, with overall growth of 5 per cent, average per capita income up 3 per cent and inflation steady at under 10 per cent. Two-thirds of the 30 countries surveyed in the Africa...

Strong commodity prices are driving Africa’s growth, which should be about 6 % in 2007 and 2008. External vulnerability is a function of its limited integration into international trade and investment flows. Africa should mobilise external sources more strategically. In this respect, aid for...

The Extractive Industries Transparency Initiative (EITI, www.eitransparency.org) aims to improve transparency and accountability by the full publication and verification of company payments and government revenues. The revenues flowing from natural resources extraction are huge. EITI is one of...

Access to energy is essential for economic, social and political development. Despite its enormous potential in fossil and renewable energy sources, Africa suffers from major energy deficits. The continent’s resources are underexploited or exported in raw form or wasted in the course of...

Africa is unlikely to reach the drinking water and sanitation Millennium Development Goals. Disparities among countries are large, and the deficit in sanitation is greater than that for drinking water. Serious reforms in institutions, legal frameworks, and policies are needed.

Transport infrastructure has been dangerously neglected in recent times. Lack of transport infrastructure impedes economic integration and poverty reduction. Involving the private sector in financing the transport infrastructure is proving harder than anticipated.