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Africa’s Manufacturing Malaise

Author

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  • Bhorat, Haroon
  • Steenkamp, Francois
  • Rooney, Christopher
Abstract
The levels of poverty and inequality in Africa are high in relation to the rest of the world. In order to reduce these twin ailments, more and better jobs need to be created. A key source of more and better jobs for developing countries is to be found in the manufacturing sector. Structural transformation involves the shift of productive resources from low productivity primary activities toward high productivity manufacturing activities. Therefore, understanding the constraints that countries face when trying to structurally transform and develop their manufacturing sector is important. In order to analyse the constraints to manufacturing growth, particularly in African countries, we employ the Atlas of Economic Complexity analytical framework developed by Hausmann & Hidalgo (2011). The analysis shows that, in general, African countries have not undergone manufacturing-led growth-inducing structural transformation. However, Africa is not one country, and the analysis demonstrates heterogeneity in the African experience, with some African countries exhibiting growth in their manufacturing sectors. The analysis indicates that the process of structural transformation is a path-dependent one, in which a country’s current productive capabilities embodied in its export structure, influence the extent to which it can shift production toward increased manufacturing activity. We argue that, with regard to manufacturing sector growth in Africa, there is no policy ‘silver bullet’. Rather, subsequent analysis needs to determine the specific productive capabilities required by manufacturing firms in African countries on a case-by-case basis.

Suggested Citation

  • Bhorat, Haroon & Steenkamp, Francois & Rooney, Christopher, 2016. "Africa’s Manufacturing Malaise," UNDP Africa Reports 267780, United Nations Development Programme (UNDP).
    • Handle: RePEc:ags:undpar:267780
    DOI: 10.22004/ag.econ.267780
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    Cited by:

    1. Haroon Bhorat & Christopher Rooney & François Steenkamp, 2019. "Building Economic Complexity in Africa," Working Papers 201906, University of Cape Town, Development Policy Research Unit.
    2. Haroon Bhorat & François Steenkamp & Christopher Rooney & Nomsa Kachingwe & Adrienne Lees, 2016. "Understanding and characterizing the services sector in South Africa," WIDER Working Paper Series 157, World Institute for Development Economic Research (UNU-WIDER).
    3. Hlalefang Khobai & Clement Moyo, 2021. "Trade openness and industry performance in SADC countries: is the manufacturing sector different?," International Economics and Economic Policy, Springer, vol. 18(1), pages 105-126, February.
    4. Haroon Bhorat & François Steenkamp & Christopher Rooney & Nomsa Kachingwe & Adrienne Lees, 2016. "Understanding and characterizing the services sector in South Africa: An overview," WIDER Working Paper Series wp-2016-157, World Institute for Development Economic Research (UNU-WIDER).
    5. Bhorat Haroon & Ravi Kanbur & Rooney Christopher & Steenkamp François, 2017. "Working Paper 256 - Sub-Saharan Africa’s Manufacturing Sector: Building Complexity," Working Paper Series 2367, African Development Bank.
    6. Ahlin, Christian & Gulesci, Selim & Madestam, Andreas & Stryjan, Miri, 2020. "Loan contract structure and adverse selection: Survey evidence from Uganda," Journal of Economic Behavior & Organization, Elsevier, vol. 172(C), pages 180-195.
    7. Kanbur, Ravi & Steenkamp, Francois & Rooney, Christopher & Bhorat, Haroon, 2017. "Sub-Saharan Africa’s Manufacturing Sector: Building Complexity," CEPR Discussion Papers 12073, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Industrial Organization; International Development;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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