Working Paper 61 - Linking Africa to a Changing World

This paper examines the changing economic environment under globalization andreviews issues pertaining to international trade and capital flows. It places emphasis onthe trends, issues, and arguments about regional trade arrangements (RTAs) and foreigndirect investment (FDI) on the ground that these would be the key for Africa in its strategyto link itself to the global economy. The paper discusses the marginalization of Africa inthe rapidly integrating global economy and its possible explanations. It is shown thatindustrial countries have been wide open to Africa’s exports relative to those from otherregions, and that the problem lies on the part of Africa in its restrictive domestic as well asimport (openness) and export policies. The paper considers strategies for linking Africato a changing world moving into the 21st century. Necessary reforms on the part of theAfrican economies, and initiatives that industrialized countries and multilateral institutionssuch as the WTO and the World Bank can take are enumerated.