Typology of African economies and their potential for industrial development Milasoa Chérel-Robson...
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![Page 1: Typology of African economies and their potential for industrial development Milasoa Chérel-Robson Africa Section, Division for Africa, Least Developed.](https://reader035.fdocuments.us/reader035/viewer/2022062713/56649cc25503460f9498a567/html5/thumbnails/1.jpg)
Typology of African economies and their
potential for industrial development
Milasoa Chérel-Robson
Africa Section, Division for Africa, Least Developed Countries and Special
Programmes, UNCTAD
Workshop on Industrial Development and
Globalisation17 May 2011
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Structure of the sessionI. Brief history of industrial development in Africa
II. Stylised facts about the state of industrial development in Africa
III. Moving forward : typology of African countries and potential for industrialisation
3-4 minutes per slide including class discussion and questions
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I. Brief history of industrial development in Africa
Key point: Lessons learnt from past policies and their impact (or lack of) on industrial performance in Africa.
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• Political vision of a modern, industrialised continent after independence
• Past policy phases:
1960s-end 1970s: Import Substitution Industrialisation
Early 1980s-late 1990s: Structural Adjustment Policies
2000s: Poverty Reduction Strategies
I. Brief history of industrial development in Africa
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Contribution of Industry to GDP 1970-2008 (%)
% share of GDP 1970 1980 1990 2000 2005 2008 World Industry 36.88 38.10 33.25 29.09 28.77 30.08 Manufacturing 26.70 24.38 21.74 19.18 17.77 18.13 Mining & utilities 3.87 7.08 5.17 4.51 5.46 6.21 Developing economies Industry 27.29 41.05 36.80 36.29 38.86 40.24 Manufacturing 17.56 20.19 22.39 22.61 23.32 23.73 Mining & utilities 5.67 14.66 8.87 8.29 10.05 10.93 African developing economies Industry 13.11 35.62 35.22 35.54 38.78 40.68 Manufacturing 6.25 11.92 15.31 12.81 11.59 10.49 Mining & utilities 4.81 19.28 15.16 18.43 22.98 25.75 Eastern Africa Industry 3.12 7.80 20.56 18.58 20.60 20.28 Manufacturing 1.67 4.93 13.37 10.37 10.31 9.68 Mining & utilities 0.83 1.48 3.33 3.11 3.63 3.65 Middle Africa Industry 34.23 38.41 34.08 50.40 57.88 59.79 Manufacturing 10.27 11.81 11.19 8.24 7.25 6.36 Mining & utilities 19.11 21.19 18.88 39.26 47.87 50.52 Northern Africa Industry 34.21 50.02 37.40 37.81 44.97 46.01 Manufacturing 13.63 9.68 13.39 12.77 11.26 10.72 Mining & utilities 15.70 33.02 17.15 19.48 28.16 29.81 Southern Africa Industry 38.18 48.24 40.63 32.69 31.71 34.45 Manufacturing 22.03 20.90 22.89 18.37 17.94 18.20 Mining & utilities 11.98 24.01 14.32 11.65 11.18 13.07 Western Africa Industry 26.70 43.27 34.52 39.81 36.66 37.42 Manufacturing 13.28 16.78 13.10 7.75 6.00 5.01 Mining & utilities 7.65 21.26 18.81 29.29 27.72 29.61
Source: UNCTAD Database
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• Linkages are needed between agriculture and industry.
• Interaction and coordination between the government and the private sector is necessary.
• Political stability is a necessary condition for industrial development.
• Sustainability is as important as initiating an industrial programme.
Selected lessons learnt from the past
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• II. Stylised facts about industrial development in Africa
Key points: a detailed outlook on Africa’s poor industrial performance today.
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II. Stylised facts about industrial development in Africa (1)
• The contribution of manufacturing to GDP peaked in 1990 and fell thereafter
• Africa still accounts for a very low share of global manufacturing
• Manufacturing in Africa is small relative to other developing-country regions and has been falling as a share of both GDP and exports
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Figure 1: Structural transformation of Africa's economy vis-à-vis other developing regions
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Figure 2: Structural transformation of Africa's exports vis-à-vis other developing regions
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• But progress has been made in boosting medium and high technology manufactures.
• Africa is losing ground in labour-intensive manufacturing sectors.
• Africa has very good performance in resource-based manufactures.
Stylised facts about industrial development in Africa (2)
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Figure 3: importance of low technology manufacturing exports and trade balance
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• African manufacturing is dominated by small firms
• African firms have weak technological capabilities
• Industrial clusters play an important role in African manufacturing
Stylised facts about industrial development in Africa (3)
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• Informality is a feature of African manufacturing
• Manufacturing performance varies across African countries
• Overall, structural transformation towards manufacturing has been slow across Africa
Stylised facts about industrial development in Africa (4)
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III. Typology of African economies
Key points: Situating African countries in terms of their industrial performance and their potential for industrial development.
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III. Typology of African economies (1)
Based on two indicators:• The industrialisation level of each country
is captured by its manufacturing value-added per capita.
• The industrial growth performance is captured by the compound annual growth rate of MVA per capita.
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Typology of African economies (2)
African countries are divided into five groups based on UNCTAD/UNIDO research.
• Forerunners• Achievers• Catching-up• Falling behind• Infant stage
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Typology of African economies (3)
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Typology of African economies (4)
Only 10 out of 53 African countries have a relatively more advanced manufacturing base
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Top performing 15 countries
• 4 Forerunners: long-term sustained-growth path; industrialization level at least twice the African average; an industrial growth performance of at least 2.5 percent
• 6 Achievers: dynamic but industrial growth performance below 2.5 percent
• 5 Catching up: high industrial growth rates but less than $200 MVA per capita
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Visual classification of African countries
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Next steps
• Industrial diagnosis and international benchmarking per country.
• First step: government must collect all relevant information in collaboration with all stakeholders
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Thank you !
Source: recent joint research by UNCTAD and UNIDO
Additional notes and references will be provided in final CD of the course.