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Friday, June 19, 2015

Must Africa Industrialize to Really Rise?

"Structural transformation now dominates the continental discourse of African leaders. That means a clear realization of what has not happened—as reflected in low agricultural productivity, a contraction of value added in manufacturing, limited poverty reduction, and lack of jobs and inclusive policies. Today, then, the fork in the road for Africa points to one direction and one choice: the need to use the favorable winds to achieve economic transformation, and to accomplish this through industrialization" - Carlos Lopez (@ECA_Lopes) on Industrialization: The Good Road Ahead 

"According to [Dani] Rodrik, self-sustaining growth begins to occur when an economy undergoes a structural transformation from relying less on agriculture to relying more on industry. That is, self-sustaining growth is underpinned by large-scale industrialization. This is the historical lesson of the East Asian tigers, of China, and of even the West. Unfortunately the facts for Africa point in the opposite direction. Yes, African labour has moved out of agriculture in large numbers, but the beneficiary has not been manufacturing but services. The service sector tends not to be as “productive” as the manufacturing sector. And productivity, which is the ability to produce ever more output from the same amount of inputs, is what drives and sustains growth. The share of manufacturing in the economies of most African countries has declined from about 15% in the 1970s to around 10% today. That is Africa has in fact deindustrialized! And even the 10% of GDP that is manufacturing is mostly made up of small informal firms that are not particularly productive and are unlikely to evolve into big formal firms...Africa needs to industrialize for it to really rise" - Grieve Chelwa (@gchelwa) on Is Africa really rising? History and facts suggest it isn’t

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