Africa has an opportunity, with a little creativity and foresight, to turn the current global economic slowdown into substantial reforms that could have lasting beneficial impact.

Recent acceleration in the expansion of African economies - which reached an impressive average growth rate of 6 per cent in 2007 - largely came on the back of increased capital inflows and a benign international environment. With both of those conditions under serious threat, now is the time for aggressive action. In particular, fixing the investment climate on the continent can ensure the growth momentum of the last few years is not lost and that Africa is well placed to thrive during the next cyclical upswing. If the continent is to attain middle income status, it must make it easier for local enterprises to do business and become more competitive in attracting foreign investment.

Infrastructure development is absolutely critical. Growing evidence points to electricity as the number one constraint on private sector growth. Policymakers must seize upon the slowdown as a window of opportunity to find inventive ways to bring public and private investment to generate, transmit, and deliver much more electricity.

Transportation is another vital area for improvement, not only by focusing on building new roads but also creating sustainable ways to maintain existing ones.

Regulatory reform is a second major challenge. There are simply too many barriers to entrepreneurs starting, operating, and growing businesses in Africa. Many of these regulations are outdated and unnecessary - or deliberate obstacles aimed at protecting privileged interests.

Lastly, Africa needs to find cooperative ways to overcome the structural challenge of small market size. Sub-Sahara's total economy is equivalent to that of metropolitan Chicago, but spread over a vast area and segmented into 48 separate countries. This is hugely inefficient and prevents scale. Investors will always be most interested in large markets, making regional integration more important than ever.

Fortunately, there is good news on many of these fronts.

Private capital inflows are already slowing down, but many investors in Africa are taking a long-term view. Much of the money raised for private equity in recent years has not yet been placed, so while new capital-raising is likely to be put on hold, funds should still continue to flow into bankable projects. Hopefully, this existing pipeline will be long enough that the upswing will begin before it runs dry.

Donors do not appear set to abandon Africa either - at least not yet.

American aid to the continent is unlikely to see an immediate fall because of the length of the budgeting process in Washington. Current commitments in the pipeline are likely to push US flows higher at least into 2010. What happens after that will of course depend on the political choices made by the new US administration.

The World Bank is also in a fairly strong position. It recently received a record replenishment of its International Development Association (IDA) arm, which provides grants and loans to the world's poorest countries. Its middle-income window, the International Bank for Reconstruction and Development (IBRD), is also in a relatively strong fiscal position. This means the Bank's importance as a multilateral lender will only grow in the next few years.

This is also an opportunity for Africa to help the World Bank do its job better. The current focus of the Bank is on country programmes. But many of the challenges for Africa require more of a global or regional approach to tackling shared challenges. A new window to channel resources towards addressing regional and global public goods - regional infrastructure, global health, climate change, and energy technology - would be a powerful complement to individual country programs.

The global financial crisis is already affecting Africa and creating new challenges, many of which are out of the continent's control. But the real task ahead for Africa is to get serious about laying the foundation for the next wave of economic growth.

Todd Moss is a senior fellow and director of the Emerging Africa Project at the Center for Global Development, a non-profit policy research organization based in Washington DC that is committed to reducing global poverty and inequality and to making globalization work for the poor.