Exploring macroeconomic frameworks conducive to structuraltransformation of sub-Saharan African economies

tThe conventional macroeconomic policy framework, with its focus on maintaining macro stability is inad-equate for the purpose of accelerating the structural transformation of African economies. This ‘policyposition’ paper explores an alternative framework, wherein macroeconomic policies are applied coher-ently to one another and in coordination with other policies, and a resolution of the short-run trade-offbetween the macroeconomic policy objectives of stabilisation and development is sought in terms ofa long-term development approach for enhancing both aggregate demand and supply capacity as ananchor for navigating a path towards structural transformation. After presenting a working definition ofstructural transformation, the paper presents the core elements of such a framework and discusses thecorresponding policy agenda under five headings. Using this agenda as a benchmark, it discusses howto approach the debates on fiscal, monetary and financial policies, avoiding the limitations of standardmacroeconomic literature, in order to make those policies conducive to Africa’s structural transformation.