One of the strengths of the new UNU-WIDER and Brookings book Made in Africa is that, in the best sense of the word, its proposals are debatable. It provides evidence and arguments for particular policies. These arguments can be debated and form part of the conversation that allows policymakers can take informed decisions.
The pattern of structural change in Africa seems different from elsewhere. Rather than following the standard pattern of labour moving from low productivity agriculture into light manufacturing and up the value chain, the change has been towards extractive industries for export, and movement into low paid service industry jobs in cities. The book builds the case that manufacturing is essential for development and structural transformation. No country has achieved wealth for its citizens without manufacturing--why should African economies be different?
Industrial policy is back on the agenda
Industrial policy is back on the agenda. African governments face a daunting list of issues, and cannot finance all that needs to be done. The authors argue that coherent industrial policy to support manufacturing should be among the priorities. The widely quoted figure of an infrastructure gap of $93 billion per year (2009) becomes more realistic if localized support for export-oriented industry is prioritized.
It is unrealistic to try to fulfil an investment climate agenda which closes all the skill and infrastructure gaps. To help exporters, uninterrupted electricity supply and improved transport links are essential. Specialist training and skills to equip exporters in a limited area such as a Special Economic Zone are more realistic than a comprehensive national plan. To improve export chances, policy and institutional reforms, improved trade logistics and better regional infrastructure and institutions are needed.
Improved coordination between governments and firms
Surveys have identified many of the issues considered important by firms in Africa. Governments should engage with the private sector in a structured way to address these issues. Even initiatives such as Presidential Investors' Advisory Councils have been disappointing. The authors conclude: "Put bluntly, the region and its heads of state will need to raise their game in close coordination." Governments need to provide the policy environment and specific measures to increase firm level performance to enhance exports.
Promoting and retaining foreign...