A cursory look at national and pan-Africa policy statements suggests that many African countries have a strong desire to industrialise. They have a point: manufacturing creates jobs, diffuses technology and makes the economy more resilient. Unfortunately, much analysis points to a reduction recently in the share of manufacturing as a percent of GDP on the continent, although significant progress is being made in selected countries. Real manufacturing value added has grown around 7% annually or more over 2005-2015 in Tanzania, Rwanda or Ethiopia. And few realise that real manufacturing production and exports of manufacturing doubled in sub-Saharan Africa in the decade to 2015.1
However, despite selected successes, many African countries will miss significant opportunities presented by their comparative and natural advantages, rising wages in Asia, and growing regional markets if they do not place a greater practical focus on implementing a co-ordinated strategy around manufacturing. Research2 on economic transformation over several years in various African (and Asian) countries uncovers key characteristics of a good industrial policy regime, factors behind effective implementation and country examples, recognising that whilst there are broad commonalities, the specifics will always be particular to the context.
So, what is a quality industrial policy regime?
Important substantive factors behind industrialisation and job creation include the political commitment to promote investment in employment-intensive manufacturing and the quality of the industrial policy regime. A good quality industrial policy regime includes:3
Unlock the potential of African entrepreneurs for accelerating Africa’s industrial transformation, says the African Economic Outlook 2017
AfricanEconomicOutlook.org offers comprehensive and comparable data and analysis of 54 African economies.