Africa's Industrialization Prospects: A Fresh Look

Wim Naudé and Fiona Tregenna

No 16043, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper identifies the determinants of industrialization in 18 African countries, 1965 to 2018, using various estimators and applying a battery of robustness checks. Industrialization in Africa is driven by historical legacies such as colonialism; geographical factors such as rainfall and distance from international markets; economic factors such competition from China, market size and urbanization; and technological factors such as digital technology adoption. An inverse U-shape relationship between industrialization and GDP per capita is consistent with (premature) de-industrialization. Technological change and adoption of digital technologies are found to have an ambiguous relationship with industrialisation in Africa. The establishment of the AfCFTA is timely, but its benefits will only be realised if countries also improve infrastructure to overcome the negative consequences of adverse geography, improve trade facilitation to exploit learning-by-exporting from intra-African trade, and facilitate urbanization.

Keywords: industrialization; development; employment; technology; trade; Africa (search for similar items in EconPapers)
JEL-codes: E21 E25 J24 O33 O47 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2023-03
New Economics Papers: this item is included in nep-afr, nep-dev, nep-fdg, nep-gro, nep-int and nep-lma
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