Africa’s economic future: harnessing the business and macroeconomic synergies for sustainable development

Achieving sustainable development outcomes has remained a serious challenge in most African countries despite decades of development planning and macroeconomic reforms. Therefore, this study employed the Newey-West and Quantile regression techniques to examine the impact of the business and macroeconomic environment on economic growth and sustainable development in Africa from 2003 to 2019. Given data limitations, the study used two samples (the first for economic growth and the second for sustainable development). The first sample has 35 countries, and the second sample has 33 countries. The findings convincingly revealed that smoothing the business environment and maintaining macroeconomic stability are critical drivers for economic growth and sustainable development in Africa. Specifically, for the business environment, the findings demonstrated that the ease of business startup and improved business extent disclosure have significant positive impacts on economic growth and sustainable development in Africa. In contrast, higher business startup costs and bureaucratic business startup procedures undermine economic growth and sustainable development in Africa. On the other hand, concerning the macroeconomic environment, the results indicated that a higher annual inflation rate, exchange rate volatility, a higher lending interest rate, and net inflows of foreign direct investment constrict economic growth and sustainable development in Africa. These findings call for the urgent need for African governments to simplify business registration processes and lower costs for starting a business, strengthen business disclosure frameworks, lower lending interest rates, restructure and regulate incoming FDI, and maintain macroeconomic stability for shared prosperity and sustainable development.