The policies of adjustment pursued in the 1980s and 1990s promised African countries not only 'accelerated development' but also a means to end Africa's marginalisation from the process of globalisation by encouraging foreign investment and the expansion and diversification of exports. While for much of the 1980s and early 1990s, the poor performance of African economies was blamed on the failure of African governments to adopt 'the right policies', by the mid-1990s, international financial institutions were saying that the significant adjustments made by African economies had led to economic recovery. However, the performance of African economies with respect to both investment and trade diversification remained poor. Since this could no longer be explained away by saying that African economies had not adjusted, other explanations were needed: these included institutions, geography, culture and ethnic diversity. In this paper I argue that it is the deflationary policies under the structural adjustment policies (SAPs) that have placed African economies on a 'low growth path' which has discouraged investments, trade expansion and diversification, by undermining the investment-growth-trade nexus. Indeed, as a result of this, African economies have been so maladjusted that they responded poorly to a wide range of economic stimuli
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