Working Paper 88 - Growing a Knowledge - Based Economy: Evidence from Public Expenditure on Education in Africa

In spite of its major development challenges, Africa is showing signs of a reversed trend: economies have been growing for the sixth consecutive year, conflicts are declining and many countries are now managing democratic political transitions. The continent now faces the best opportunity for growth in the past 30 years, as pessimism is gradually being replaced with greater confidence, assertiveness and optimism. The question that still remains critical is whether or not Africa will be able to sustain these positive trends. There is a consensus that for Africa to sustain this growth, it needs to harness science and technology in various sectors, integrate into global markets, and transform its economies to face the fierce global competition, in a world fueled by information and driven by knowledge. Against the background of declining knowledge infrastructure, brain-drain, limited support to research and development (R&D), outdated curricula and limited direct links between science and industry, Africa risks losing out in the new economy, unless deliberate and bold initiatives are implemented to reinvigorate higher education, science and technology and innovations on the continent (Juma and Awara, 2006). The objective of this paper is to articulate the need for growing a knowledge-based economy in Africa, whereby research knowledge and innovation become central in paving the way to development and economic growth. Emerging issues related to the dynamics of public expenditure on education and economic growth and human capital development in Africa are critically examined, using empirical data from the 52 African countries. The paper concludes by discussing key issues that require attention is investing in education and knowledge generation in Africa, so as to maximize returns on such investments in the continent’s quest for growing into a knowledge-based economies.