2

Achieving an African Industrial Revolution

BEIJING – In the mid-2000s, after decades in the slow lane, African economies hit the accelerator. But what lies ahead for the continent is not an open highway. If Africa is to achieve its potential as the next emerging-market engine of global economic growth, it will have to industrialize.

Economists agree that, since the first Industrial Revolution, the rise of labor-intensive light manufacturing (textiles, garments, shoes, and associated tools and machinery) has played a major role in pushing up national incomes. But Africa has not managed to take part fully in industrialization, a failure that has caused it to lag behind the rest of the developing world since the 1970s. In 2015, all of Sub-Saharan Africa exported only as much apparel as tiny El Salvador.

Africa desperately needs an industrial revolution if it is to create jobs for its fast-growing youth population and reduce migration pressure. Some of the building blocks are well known: effective and reliable governance institutions, modern infrastructure, and education. What is less clear is who should play what role in supplying them.

Start with government. For the last few decades, the prevailing view guiding economic policy was that market forces should be left to operate undisturbed. Any state intervention, it was assumed, would be either ineffective or dangerous.