Africa’s Industrialization Challenges

On Brookings’ Africa in Focus blog, John Page touts his co-authored new book Made in Africa: Learning to Compete in Industry, criticizing the World Bank and other donors for their lack of support for the continent’s manufacturing sector:

In its January 2016 Global Economic Prospects report the World Bank proposes a policy solution to Africa’s continued vulnerability to commodities: “creating the conditions for a more competitive manufacturing sector.” Sadly, while advocating “structural reforms…to alleviate domestic impediments to growth [and] a major improvement in providing electricity,” the Bank is woefully short on specifics. This is hardly surprising. Beyond supporting improvements in the “investment climate”—structural reforms by another name—and pushing its Doing Business agenda, the Bank and the larger donor community have ignored Africa’s industrialization challenge for more than 20 years.

I would go even further. The World Bank and others have actively pushed resource-rich countries to prioritize developing an export economy and mega-projects like Congo’s Inga Dam to the detriment of investing in local value chains.

Sometimes this has been explicit, like when pressuring countries to sign up to a free trade agenda, even though this exposed local businesses to vastly more competitive competition from abroad. At other times, it has been more of a byproduct of how the system works, like how measuring economic success by GDP masks fundamental problems with equitable development.

Page rightly asks African governments to “address the objectives of boosting manufactured exports, supporting industrial agglomerations, and building firm capabilities”. I would add that these technocratic fixes must be accompanied by measures to ensure the equitable redistribution of the benefits garnered by both resource extraction and industrialization to have an actual positive impact on the lives of the majority.

Commodities, industry, and the African Growth Miracle via Africa in Focus