The slowing growth throughout the world over the past number of quarters has
been uncomfortable for advanced countries, but a real source of hardship to
many developing countries and a real setback to the fight against world poverty.
These developments underscore the need for an integrated concept for answering
critical questions about globalisation and the difficulties of specifically
African countries to share in the concomitant generation of wealth. NEPAD has
to do just that. Success in the fight against poverty is the key to stability and peace
in the twenty first century and nowhere is the battle lines clearer than in Africa.
This process will require innovative thought from both government and the private
sector. Economic growth does not simply equate human progress. Hence the
long and central debate as to what, seemingly in conflict, contributes to economic
efficiency and what to distributive justice. This debate confounds national
economic policy response to our vast poverty and all too common human
degradation. It appears as if the latter problem is missing in the core economic
assumptions on which the New Partnership for Africa's Development (NEPAD)
rests. The country cannot afford to have unrest caused by growing tension
between the demands of the constitution that defines human dignity as the prime
task of the state, and the need for disciplined economic policies that would
ensure foreign direct investment and competitiveness in the foreign markets.
The embarkation on this high road faces many constraints, mostly on the supply
side of the economy. The economy responds growth-wise more favorably to policy
approaches that directly address supply-side constraints (e.g. decreases in
unskilled real wages, improvements in education, and human development levels
and FDI), than to demand-side expansions. The demand-driven policy
approaches (such as increases in government expenditure and exports), seem to
encounter supply constraints at the four to five percent growth level. There against increased investment in human skills and foreign direct investment, easily
raise economic growth to levels above six per cent. Thus, a balanced approach
is necessary with well-targeted government expenditures aimed at increasing
investment in human capital, research and development, and productivity. In
what follows a number of macro issues that require urgent attention are discussed.