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The rise of a capital market culture

African economies are in a growth phase, thanks in large part to rising commodity prices. Sustained growth, though, depends on industrialization and that in turn depends on much higher levels of foreign investment. Anything near adequate funding is a long way off but there are at last encouraging signs of capital market development in some sub-Saharan countries.

THE PRESIDENTS OF Kenya, Malawi and Uganda are not young, but each is representative of a new spirit of reform spreading throughout much of Africa.

Each has recently overthrown or succeeded a regime that was autocratic and corrupt, and each has an understanding of economics that makes him well qualified to pursue or accelerate reform programmes.

Kenya's Mwai Kibaki studied public finance at the London School of Economics after a stint at Shell East Africa. Malawi's Bingu wa Mutharika is a former World Bank economist. And Uganda's Yoweri Museveni read economics and political science at the University of Dar es Salaam before leading a five-year struggle to topple the rotten regime of Milton Obote.

Three progressive presidents, of course, do not equal pan-continental reform. And while their economies might be among those heading in the right direction, Africa seems destined to throw up those such as Zimbabwe, Sudan and Mauritania that are resolutely travelling the other way.

Nevertheless, it is clear that the IMF has been encouraged by progress made by economies across the sub-Saharan region. Other commentators have applauded such initiatives as the New Partnership for Africa's Development (Nepad) and the Millennium Development Goals (MDGs), which have been adopted by most regional governments and aim to halve poverty by 2015.

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