Abstract

Africa has long been strongly integrated into the global economy. In respect of product markets, the typical African country trades a high share of its GDP, its economy being small and specialized in primary exports. In respect of capital markets, Africa was arguably the first continent to become highly integrated: a higher proportion of African wealth is held internationally than on other continents. Thus, in one sense “globalization” is not new to Africa, but it has meant primary exports and capital flight. However, when economists now talk of globalization they mean something rather different. Specifically, they mean falling trade barriers, integrating financial markets, and transnational corporations. In this chapter, I argue that these changes can potentially integrate Africa into the world economy in a new way, but that whether these opportunities are taken up depends upon African economic policy.