Economic growth, industrialization and macroeconomic analysis on Africa

This chapter (I) aims to study the impact of remittances from African migrants on their home countries’ growth and development. These funds constitute a steadily increasing financing means in all these countries, even though development aid is still the preferred financing method. To highlight the role of these funds, we relied on a number of experiences as far as their targets and uses are concerned. Globally speaking, stylized facts based on case studies show that remittances have a positive impact on migrants’ home countries’ economies. In particular, they reduce household poverty and thereby increase their well-being. In addition, they stimulate local economic activity and growth. Given the role and stability of these funds, cost reduction is essential to encourage migrants to send more money through official transfer channels. It is also necessary to increase the managerial efficiency of these funds by orienting them towards implementing profitable projects, rather than devoting them entirely to household consumption. Lastly, it is necessary to encourage the capture of related financial flows by the traditional banking system and microfinance institutionsThis chapter (II) showed that industrialisation by substitution of imports has been a failure in Africa and has made industries in this part of the world less competitive on the foreign market. As such, a different industrialisation strategy which in the context of globalisation of economies and the fierce competition of the international market reinforces the competitiveness of African countries. This new strategy was translated amongst others by the appropriation of new technologies, protection of infant industries, cloning of manufactured products imported out of Africa, regional integration and the culture of exporting manufactured products.This chapter (III) examines the different strategies required for the sustainability of sub-Sahara Africa’s external debt by applying the Simonsen criterion and the conditions of the Harrod-Domar debt and growth model. We then suggest that for debt to be sustainable the financial ratios have to be respected. So the effective servicing of the external debt in Sub-Saharan Africa requires that the expenses incurred in reducing poverty should be known. If the difference between the net returns and the expenses incurred in fighting against poverty is negative this reduces the burden of the debt. Finally, we recommend that Sub-Saharan African countries should use a combination of strategies based on sustainable development, financial resources of the government, and regulatory and institutional norms to manage their debts sustainably.