UNECA launches Transformative Industrial Policy for Africa
In April 2016, the United Nations Economic Commission for Africa launched “Transformative Industrial Policy for Africa”, a Special Report authored by University of Cambridge development economist Ha-Joon Chang. The Special Report begins by giving 1) a historical account of Africa’s development strategy; 2) full theoretical exposition of industrial policy; 3) experiences of industrial policies in developing countries; 4) industrial policy for Africa in the new global environment; and finally 5) way forward. The purpose of this brief is to summarise the above insights.
Africa is at a crossroads. After a long colonial history, violent conflict (liberation struggles, civil wars, and military coups), and economic turmoil (the varied experiences of initial post-colonial economic development, adverse impact of the Structural Adjustment Programmes of the 1980s and the 1990s), it has finally seen a decade of improved economic growth and greater political stability. Once written off as a continent uniquely suffering from structural impediments to economic growth and development – poor climate, disadvantageous geography, ethnic diversity, poor institutions, cultural prejudice etc. – there has been more recent optimism about the future of the continent. The talk of ‘African growth tragedy’ is being replaced by a talk of ‘Africa rising’.
Following the commodity boom, however, it seems that the opportunities of ‘Africa rising’ may have slipped away. The commodity crisis brought into very sharp focus the need for industrialisation and diversification. In order to avoid the negative effects of a commodity crisis, African countries must focus on building opportunities to advance industrialization. With a coherent policy, countries have the potential to drive inclusive, broad-based growth and development to achieve structural transformation. A major lesson learned from successful industrial policy is that Governments should act as facilitators and enablers.
The manufacturing sector in particular has been the engine of economic development for the majority of developed countries, and very few countries have developed their economies without a strong manufacturing base. In developing countries such strategies, policies must include investments in infrastructure, human capital and energy, all of which are critical for expanding the manufacturing sector. For many African countries, the manufacturing sector will be essential for creating employment, diversifying technological capabilities that promote and expand the skills base and deepening individual countries’ industrial structures.
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