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.

Cancelling of poor-country debt does not mean that the best way to give aid is through grants only. Aid through loans may often prove superior, provided that it maintains debt sustainability. A new scheme for soft loans is suggested, with higher interest rates and cancellation provisions if bad...

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.

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...

Poor countries will remain vulnerable to external shocks from export prices or from natural disasters for some time. Indeed, the lowest income countries have an even higher incidence of such adverse events than other developing countries and tend to suffer larger damages when they occur.

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.