Orthodox & heterodox policy for growth for Africa South of the Sahara

In no region of the developing world have neoliberal policy reforms been so unsuccessful in stimulating recovery as in Africa south of the Sahara. There is an urgent need for policy formation to move from ideological generalisations to pragmatism. The structural characteristics of the region and empirical evidence indicate that policy should focus upon identifying effective forms of state interventions, rather than emphasis upon restricting the role of governments. In the past governments in the region engaged in many activities either ill-advised or beyond their capacity. But the time has come to move from the dismantling of the state to fostering and extending its positive role, a change recognised in rhetoric by the World Bank. Further deregulation and restriction of government action would not produce a growth performance consistent with expanding employment and improving livelihoods. A less ideological and more growth-focused macroeconomic policy is essential to a new policy consensus. While this has been conceded in principle by the Chief Economist of the World Bank, it has yet to have its impact on the policies of the multilaterals in Sub-Saharan Africa.The first step towards an employment-generating and poverty-reducing strategy is faster growth. No matter how often it is asserted, deficit cutting, exchange rate liberalisation, and high real interest rates do not constitute a growth strategy. Were stimulating growth this simple, the sub-Saharan countries would have recovered long agofrom their decades of stagnation and decline. Adjustment policies, as they are currently formulated for the countries of the region, constrain growth at the macro level. This might be justified were the region characterised by high inflation and other indicators of chronic instability. Except for a few countries, inflation is not rampant in cross the sub-Sahara; on the contrary, prior to the adjustment period the region-wide average rarely rose above fifteen percent. The problem in the Sub-Saharan region has been slow growth and lack of export diversification, not macroeconomic instability. [author]