Due to the presence of faulty policies during the past, the country has suffered a lot and led to the economic growth being slow and sluggish. Earlier, the inappropriate economic policies led to the decrease in living standards, poverty became pronounced to top it all employment reigned supreme.
During the period 2000 to 2004, the real gross domestic product or the GDP was 3.4%. This figure was obtained before the process of democratization. As per records obtained in the year 2005, rate of inflation was quite comfortable ranging between 3% to 6%.
Real rates of interest were brought down during the same period. It was suggested that rates of inflation be brought down if the country wanted a stable and sustainable growth in the economy of the country.
Studies revealed that those nations, which were capable of reducing the inflation rates happened to be the ones, which achieved very fast economic growth in their countries.
It was observed that the countries, which achieved remarkable progress had an inflation rate of 12%. On the other hand, the nations, which progressed rather slowly had an inflation rate of 21%.
Owing to economic reforms in Africa, these nations had less inflation, which meant that these nations also had a low fiscal deficit.
