Some new thinking for Africa Industrialization Day
This Friday, November 20 marks yet another "Africa Industrialization Day" by the United Nations. There have now been 25 such events, and they seem to have come and gone with relatively little notice. This year may be different: Africa's failure to industrialize has come to the attention of a growing number of observers, including the venerable magazine, The Economist In its November 7 issue The Economist (http://www.economist.com/news/middle-east-and-africa/21677633-there-long-road-ahead-africa-emulate-east-asia-more-marathon) notes with some alarm at the fact that "many African countries are deindustrializing while they are still poor, raising the worrying prospect that they will miss out on the chance to grow rich by shifting workers from farms to higher-paying factory jobs."
By any measure Africa's failure to industrialize is striking. In 2013 the average share of manufacturing in GDP in sub-Saharan Africa was about 10 percent, half of what would be expected from the region's level of development. Moreover, it has not changed since the 1970s. Africa's share of global manufacturing has fallen from about 3 percent in 1970 to less than 2 percent in 2013. Manufacturing output per person is about a third of the average for all developing countries and manufactured exports per person, a key measure of success in global markets, are about 10 percent of the global average for low income countries
This lack of industrial dynamism is a growing matter of concern to Africa's political leaders, as well. The U.N.'s Economic Commission for Africa (UNECA) will publish a major report on industrialization in Africa next month. The African Union has adopted an "Action Plan for the Accelerated Industrial Development of Africa." And the newly adopted United Nations Sustainable Development Goals (SDGs) highlight the need for job creation and industrialization, two themes introduced largely at the request of African governments.
Historically, industry is the sector into which resources have first moved in the course of economic development. Industry is the pre-eminent destination sector at early stages of development because it is a high productivity sector capable of absorbing large numbers of moderately skilled workers. Between 1950 and 2006, about half of the catch-up by developing countries to advanced economy levels of output per worker was explained by rising productivity within industry combined with...