africa

Africa at a Fork in the Road: Taking Off or Disappointment Once Again?
22.4 Policy imperatives for Africa to reduce natural resource dependence and
transform its economies
22.4.1 Why Africa must embark on a transformation agenda
Actively pursuing transformation is vital for Africa to draw on its diversifying growth
sources and turn the corner towards sustained, job-creating growth. Indeed, no
country has achieved rapid and sustained economic growth without economic and
structural transformation.
In Africa thus far, economic transformation has been limited by a variety of factors,
including weak institutional and organizational capacities; low investments in industry
and productive capabilities; restrictive policy space and trade practices of external
partners; vested interests in the market for primary commodities; poor inputs to
transformation including finance, infrastructure, and policy support; and limited
development of skills and knowledge for higher value-added economic activities.
For African countries to address these constraints they will need to coordinate their
policies, particularly towards industrial development. Industrialization is recognized
as the means by which developed and developing countries alike have achieved
economic transformation, and it is a clear route for Africa to pursue employmentgenerating
growth and development. Industrialization also helps countries link into
higher segments of regional and global value chains, diversifying and increasing
exports, decreasing vulnerability to global commodity prices and demand shocks,
and generating more foreign exchange that can be re-invested in productive economic
activities and social services.
Recently, African countries have shown increasing interest in industrialization, thanks
to its potential to drive transformation and rapid successes in East and Southeast
Asia. The question has thus shifted from whether Africa should utilize industrial
policy to how and in what form.
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