URBANIZATION AND INDUSTRIALIZATION

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102 ECONOMIC REPORT ON AFRICA 2017 income but not a broad base of formal jobs, leading to “premature urbanization,” with employment growth in the non-tradeable service sector, often with a strong informal component (Gollin, Jedwab and Vollrath, 2014). Consumption cities also tend to be disproportionately expensive (Turok, 2013). The consumption cities idea underscores the importance of structural transformation and specifically labour-intensive industrial development, as growth may fail at broad-based job creation. The source of income and growth is very important. Countries can urbanize, as in some resource-rich countries, by importing food and tradeable goods and by creating consumption cities that shift workers from tradeable to non-tradeable sectors, creating a force of productivity-reducing reverse structural transformation (Gollin, Jedwab and Vollrath, 2014). The upshot is that the benefits of urbanization lie in job-rich industrial sectors and agglomeration economies that support them, but Africa has yet to generate decent jobs at the required scale, compelling job seekers to turn to the informal sector, especially in urban areas. 3.8 GROWTH FOR ALL A key factor in translating economic growth into social and human development and for achieving inclusive growth is the creation and expansion of decent work. Africa has a large, poor and increasingly urban population and is seeing growing inequality, for which reasons broad-based and jobrich economic growth and structural transformation centred on industrial development are crucial. EMPLOYMENT AND POVERTY REDUCTION The relationship between economic growth and employment in Africa is weak (chapter 2). Africa’s economic growth since 2000 has been positive, but with weak capacity to create formal jobs—even in the fastest-growing economies the employment intensity of growth is low—the default employment option is the informal economy for many Africans. Only a quarter of African young men and 12 per cent of African young women end up in wage-earning jobs before turning 30 (AfDB, 2012). Lacking many formal sector and manufacturing jobs, African cities are dominated by the informal economy. Sixty-one per cent of men and 74 per cent of women working in non-agricultural sectors are informally employed, with a larger share (60 per cent) of women in own-account self-employment (Vanek et al., 2014). Globally, the share of informal employment is the highest in Africa excluding North African cities are dominated by the informal economy. Sixtyone per cent of men and 74 per cent of women working in non-agricultural sectors are informally employed. Africa. A survey of seven Francophone African cities revealed that the average income of workers in private formal enterprises is three times higher than those in informal enterprises, pointing to a wide productivity differential (ILO, 2009). The decent work deficit in Africa is tied to weak industrial development and employment (figure 3.9), particularly in manufacturing. Worldwide the share of paid employment in the total population tends to be positively associated with industrial employment, but at 10 per cent in Africa, the share of employment in manufacturing is extremely low. The share in other global regions is at least 20 per cent and exceeds 30 per cent in East Asia (ILO, 2014). In the face of estimated annual working age population growth of 2.8 per cent (ILO, 2012), job-rich growth and industrial expansion are key for Africa. Success in job creation is also connected to broader social development issues such as poverty reduction and gender equality. Without enough paid jobs in the formal economy, the fight to reduce the number of working poor, especially women in vulnerable employment, will become harder. 9 The
International Labour Organization (ILO) estimates male and female workers in vulnerable jobs in Africa to be 70.1 per cent and 84.3 per cent, respectively (ILO, 2014). Job creation and investment in human capital through education and training are linked to combating poverty and reducing inequality. Labourintensive manufacturing and well-paying industrial Figure 3.9 Urbanization and industrial employment, 2007–2015 0 10 20 30 40 50 60 70 80 Algeria Tunisia South Africa São Tomé and Príncipe Morocco Gambia Botswana Seychelles Ghana Liberia Nigeria Source: World Development Indicators. Note: Average of data per country for the period. Egypt Namibia Senegal Benin Mauritius Zambia Guinea Sudan Zimbabwe Madagascar Tanzania Burkina Faso Lesotho Rwanda Ethiopia Malawi Urbanization (% of population) Employment in Industry (% of employment) AN OVERVIEW OF URBANIZATION AND STRUCTURAL TRANSFORMATION IN AFRICA 103
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URBANIZATION AND INDUSTRIALIZATION
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CCONTENTS LIST OF BOXES, FIGURES &
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chapter 5 URBANIZATION AND INDUSTRI
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CHAPTER 1 (CONT) Figure 1.11 Growth
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CHAPTER 4 BOXES Box 4.1 Drivers, en
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LIST OF ABBREVIATIONS USED AEO AfDB
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UN-Habitat UNICEF US USAID WDI WTO
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The lead consultant, Mr. Gulelat Ke
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FFOREWORD Urbanization is a mega-tr
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articulated. Yet, industrial target
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harnessing opportunities from rapid
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A diverse urban system can offer in
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Cities and urban agglomerations sho
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Figure 1.1 Economic growth in Afric
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In 2016, the generally weak world e
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Box 1.2 SOME POLICY RESPONSES OF AF
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year, driven by slower growth in Al
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associated with a decline in the va
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Figure 1.7 Productivity growth by A
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AFRICA’S CURRENT ACCOUNT DEFICIT
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lower global prices of oil and food
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about 4 and 5.5 percentage points,
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Box 1.3 THE CONTINENTAL FREE TRADE
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Figure 1.15 Gross domestic savings,
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are seeking to finance public inves
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Page 55 and 56: REFERENCES AfDB-OECD-UNDP 2016. Afr
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Page 119 and 120: Figure 4.1 The urbanization-industr
Page 121 and 122: 4.1 DRIVERS: URBAN DEMAND AND SHIFT
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Page 131 and 132: More recent theories of industrial
Page 133 and 134: Table 4.3 Results of selected econo
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Page 137 and 138: Figure 4.9 Top two ranked countries
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Page 141 and 142: Table 4.4 Industrial sector charact
Page 143 and 144: Box 4.5 A PATH TO FORMALIZATION Suc
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Agglomeration economies are powerfu
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Gutman, J., A. Sy and S. Chattopadh
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ENDNOTES 1 The link between urbaniz
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Still, policies that are well targe
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Figure 5.1 50,000 Four basic countr
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5.2 USING URBAN DEMAND TO DRIVE IND
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BOX 5.1 CONT. GRANTING POLICY SUPPO
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uilding superstructures are often r
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Box 5.3 RWANDA’S TRADEABLE SERVIC
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the surrounding fertile agricultura
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Despite urban primacy, secondary ci
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REPUBLIC OF CONGO A functional urba
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5.4 OVERCOMING BARRIERS TO AGGLOMER
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Box 5.5 COST-EFFECTIVE AND FAIR TEN
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Even non-BRT systems can improve tr
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in the economy as a whole, through
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5.5 INTEGRATED POLICIES TO LINK URB
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To foster industrialization, polici
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evenue is only 15.6 per cent of its
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REFERENCES Ackah, C., C. Adjasi and
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NISR (National Institute of Statist
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202 Table 6.1 Costs and benefits of
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Despite the recent slowdown of the
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