by Akinwumi Adesina-Mareeg.com-ABIDJAN – Africa is at a crossroads. Six of the world’s ten fastest-growing economies are now located in the region, and the continent’s GDP is expected to grow at a rate of 4.1% this year, up from 3.6% in 2017.
Yet Africa’s economic growth has not been accompanied by a commensurate level of job creation, which has particularly negative implications for women and young people. In fact, today’s jobless growth could even reverse the gains made in eradicating poverty in recent years.
The problem is that Africa’s growth, while impressive, has been volatile, because it has been driven mainly by high commodity prices, rather than by manufacturing. The economic effects of this imbalance should not be underestimated. Among other things, it explains why a region that produces about 75% of the world’s cocoa accounts for just 5% of the nearly $100 billion annual chocolate market.
Despite its vast natural resources, Africa will remain at the mercy of commodity prices and trade flows until it undertakes a profound structural transformation. The time has come for Africa to unlock its true economic potential by following in the footsteps of every modern economy and undertaking the transition from agriculture to manufacturing.
Africa’s manufacturing sector is the weakest link in its ongoing integration into the global economy. Today, primary products (raw materials) comprise 62% of Africa’s total exports, the highest share in the world. At the same time, manufactured exports per capita in 2014 totaled just $218, which is among the lowest levels in the world, and far below other developing regions such as Asia ($883) and Latin America ($1,099). Clearly, Africa must start catching up.
Fortunately, there is already a global consensus that industrialization matters, and that it is in everyone’s interest for Africa to become the global manufacturing power it ought to be. With its “High 5 Agenda,” the African Development Bank (AfDB) has made industrialization a top priority. Likewise, industrialization is a key component of the African Union’s “Agenda 2063.” And, in 2016, the United Nations General Assembly declared 2016-2025 the “Third Industrial Development Decade for Africa.”
But such pronouncements are meaningless in the absence of concrete action. To change the region’s economic trajectory, African policymakers must focus on three key areas: industrial policies, infrastructure financing, and leadership.
We now know that industrial policies can be effective in boosting growth. The question is whether states possess the capacity to implement the policies they design. If they do, they can channel resources toward industry and marshal available technologies to create synergy between the agriculture and manufacturing sectors.
