Africa Rising with Synchronized Growth The Role of Economic Integration

GLOBAL SYNCHRONIZED GROWTH Oxford Economics’ forecast highlights  World GDP growth accelerating to 2.8% in 2017 & for 2018 at 3.0%.  Global inflation expected to advance 2.6% in 2017 but oil prices & currency movements represent risks.  Global surveys point to buoyant activity. Composites PMI near at or above highest level in 6 yrs.  US economy will remain in 2% growth mode with inflation remaining below the Fed’s 2% target; policy and geopolitical risks.  Euro area economy is gaining momentum. Hard data are catching up to strong survey data. ECB normalization taking form.  Emerging markets growth improving though political risks still abound.

ABSENT POLICY ERRORS IN THE U.S.

AFRICA’S GROWTH PERIODS SINCE INDEPENDENCE Period One: 1960-1980. Post-independence blossoming Period Two: 1980-2000. Structural Adjustment and Debt Overhang Period Three: 2000-2007. Africa rising! Period Four: 2007 – 2015. Great Recession, uncertainly and recovery Period Five: 2015 - Synchronized growth.

Troubling Trend

Troubling Trend

Some Things Don’t Change

Some Things Don’t Change

LIFE EXPECTANCY ACROSS THE WORLD

CONVERGENCE: DAMOCLES OF INTEGRATION AFRICAN COUNTRIES CANNOT CONVERGE: SO WHAT? THE REST OF THE WORLD IS NOT CONVERGING – NO UNCONDITIONAL CONVERGENCE REGIONAL INTEGRATION CAN STILL LEAD TO UNCONDITIONAL CONVERGENCE – THE CASE OF SOCCER REGIONAL INTEGRATION CAN SUSTAIN AFRICA’S SYNCHRONIZED GROWTH BENEFITS OF COMPETITIVE POWER OF THE STATES elimination OF the encumbrances of multiple currencies,; transaction costs ; triangular currency convertibility

UNCONDITIONAL CONVERGENCE: AN INSPIRATION FROM SOCCER Krause and Szymanski (2017) show that both Β and σ convergences do occur in global soccer. Thanks to continental confederations like CAF, UEFA and Y = f(A, K, L) A being total factor productivity allows or hinders the diffusion of the benefits of integration across unionizing countries

Integration brings elusive synchronized growth Institutional Quality - Rules of the game (Property Rights and the Rule of Law Corruption and Faithful Adherence to agreed upon policies Β and σ convergences will occur if only immigration policies at the border are administered uniformly and faithfully.

Africa Rising: A Geospatial Calibration