africa

Africa at a Fork in the Road: Taking Off or Disappointment Once Again?
percent; and (c) the share of the labor force engaged in services went up by an average
of 8.3 percent. Clearly, a source of concern, to which we return subsequently,
is the small growth of manufacturing employment.
As indicated at the beginning of this section, an increase in labor productivity is
crucial to any improvement in wellbeing. Based on the unweighted average for the
same sample of African countries, annual growth in labor productivity during the
same post-2000 period was 2.2 percent, of which 1.3 percent was contributed by
growth within sectors and 0.9 percent by structural growth (workers moving from
low-productivity sectors to higher productivity sectors through the structural transformation).
The performance is even more impressive when the growth in labor
productivity is expressed as a weighted average, i.e. 2.9 percent, of which the
“within-sector” component is 2.1 percent and the structural component 0.8 percent
(McMillan and Harttgen, 2014). 13
Hence, while the flawed structural transformation before the turn of the century acted
as a drag on the economy-wide productivity of much of the African subcontinent, the
more successful transformation since 2000 appears to have contributed at least a
third of the improvement in the economy-wide labor productivity.
Because agriculture is still by far the largest provider of jobs, and of income for poor
households, in Africa, a key issue relates to the growth of productivity within this
sector. For decades, agriculture was the Achilles’ heel of African development. Made
up predominantly of small subsistence farms and plagued by poor agronomic and
geographic conditions and exploitation by extractive leaders, much of agriculture
stagnated prior to the mid-1980s. Yields remained stubbornly low and there was little
evidence of significant growth in agricultural land or labor productivity. More recent
evidence suggests that a changing policy environment and increased attention to
agriculture have had a significant effect on overall productivity growth, based on
technical efficiency gains (Diao and others, 2013). From the mid-1980s onwards,
agricultural productivity has shown gradual improvements. The productivity-based
growth raised average farm output per unit of input by a percentage point, resulting
in average growth of about 3 percent per year between 1986 and 2011. Yet, in
spite of recent progress, agricultural productivity in SSA still lags far behind other
regions of the world (Fuglie and Rada, 2013).
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