Manufacturing Transformation

Carol Newman, John Page, John Rand, Abebe Shimeles, Måns Söderbom

While it is possible for economies to grow based on abundant land or natural resources, more often structural change?the shift of resources from low-productivity to high-productivity sectors?is the key driver of economic growth. Structural transformation is vital for Africa. The region?s much-lauded growth turnaround since 1995 has been the result of fewer economic policy mistakes, robust commodity prices, and new discoveries of natural resources. At the same time, Africa?s economic structure has changed very little. Primary commodities and natural resources still account for the bulk of exports. Industry is most often the leading driver of structural transformation. Africa?s experience with industrialization over the past thirty years has been disappointing. In 2010, sub-Saharan Africa?s average share of manufacturing value added in GDP was 10 per cent, unchanged from the 1970s. In...