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Milasoa Chérel-Robson Africa Section, Division for Africa, Least Developed Countries and Special Programmes, UNCTAD Workshop on Industrial Development and Globalisation 17 May 2011 Typology of African economies and their potential for industrial development
Structure of the session • 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
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.
I. Brief history of industrial development in Africa • 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
Selected lessons learnt from the past • 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.
II. Stylised facts about industrial development in Africa Key points: a detailed outlook on Africa’s poor industrial performance today.
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
Figure 1: Structural transformation of Africa's economy vis-à-vis other developing regions
Figure 2: Structural transformation of Africa's exports vis-à-vis other developing regions
Stylised facts about industrial development in Africa (2) • 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.
Figure 3: importance of low technology manufacturing exports and trade balance
Stylised facts about industrial development in Africa (3) • 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 (4) • Informality is a feature of African manufacturing • Manufacturing performance varies across African countries • Overall, structural transformation towards manufacturing has been slow across Africa
III. Typology of African economies Key points: Situating African countries in terms of their industrial performance and their potential for industrial development.
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.
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
Typology of African economies (4) Only 10 out of 53 African countries have a relatively more advanced manufacturing base
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
Next steps • Industrial diagnosis and international benchmarking per country. • First step: government must collect all relevant information in collaboration with all stakeholders
Thank you !Source: recent joint research by UNCTAD and UNIDOAdditional notes and references will be provided in final CD of the course.