Drivers of long-term growth? Assessing the impacts of emerging countries on Sub-Saharan african economies

Abstract

After the ‘lost decades’ Sub-Saharan African economies have exhibited positive growth rates due to emerging countries. The paper shows the complexity of causalities, which depend on: i) channels (trade, investment); ii) the emerging country (especially China); and iii) African countries’ market structures. On the one hand, this growth relies on structural asymmetries and is generated by distorted export structures that are based on commodities. It falls if prices decline and increases the specialisation of African economies in commodities. On the other hand, emerging countries have positive impacts via their investments in infrastructure, which fosters industrialisation. Finally, developed countries’ aid, due to the detrimental effects of conditionality, induces far greater asymmetries than does the aid of emerging countries.