Africa’s failure to industrialize has come to the attention of a growing number of observers all over the world… many African countries are deindustrializing while they are still poor, raising the worrying prospect that they will miss out on the chance to grow rich by shifting workers from farms to higher-paying factory jobs. (Brookings)
Does Industrialization Really Matter Africa?
Yes, it does!
Industry is the pre-eminent destination sector at early stages of development because it is a high productivity sector capable of absorbing large numbers of moderately skilled workers. ( J. Page 2015)
According to Brookings, Africa’s share of global manufacturing has fallen from about 3 percent in 1970 to less than 2 percent in 2013. This is a clear indication that this sector has been ignored for a very long time, which in turn has hampered the growth of African economies.
Manufacturing today is about value addition. Manufacturing interacts with the rest of the economy — both upstream with regard to energy and raw materials, and then downstream, with distribution, logistics, environmental and financial services. Economies around the world succeed because of their ability to build backward and forward links between the various sectors of the given country’s economy as well as doing so across borders (The Globalist).
However, there are challenges as well as opportunities in financing for industrialization in African nations.
Today being World Africa Industrilization Day, the objective this year is to raise awareness on the challenges and opportunities in financing for industrialization, taking into consideration recent success stories and elaborating on how to further galvanize support for promoting Africa’s industrialization. (UN)
What Can Be Done About It?
If African nations can increase productivity within industries and combine it with increasing labor in manufacturing, rather than in agriculture alone, they would be able to catch up with advanced economies.
To achieve this, African nations need to apply a ‘marathonic’ approach to increase manufacturing and the required labor force that would help meet up with that of advanced economies.
Asides that, lack of infrastructure, skills and institutions are the main factors that constrains industrial development in Africa. If these are in place, African economies would still need to support it with three drivers of productivity—exports, agglomeration and firm capabilities. (The Economist)
Policies that promotes manufactured exports, encourages development of industrial clusters and attract more capable foreign investors should be put in place as well.
UN Secretary-General, Mr. Ban Ki-moon asserted that African nations need to embrace transformative policies that will encourage the growth of the private sector, facilitate entrepreneurial initiatives, increase investment and generate durable partnerships.
The Globalist http://www.theglobalist.com