[BLOG] What is Africa doing about its industrial policy
13-02-2012 09:02:27 | by: Administrator | hits: 2856 | Tags:

Industrial production creates job opportunities at higher skill levels, facilitates denser links across the services and agricultural sectors, between rural and urban economies and between consumer, intermediate and capital goods industries. Given the importance of industrialisation and the pressure weighing on industrial policies, it is thus useful to survey the extent to which industrialisation is a policy priority and is being pursued.

Even when it is a stated priority, does industrial promotion actually translate into specific policy tools? What instruments do African governments associate with industrial promotion?

The continuing drive to develop the sub-sector is a reflection of the universal benefits that it brings to an economy. For the countries of Africa, manufacturing provides a rational alternative as a way to jump-start development through the optimal exploitation of its rich human and natural resources on a long-term sustainable basis. However, despite these abundant resources, Africa remains the world’s poorest and most underdeveloped continent.

Clearly, the industrial policies of the constituent states of Africa have not focused on the growth driver in which the continent has comparative advantage – manufacturing. There is an urgent need for strategic diagnosis, at national and regional levels, in order to identify and assess the challenges facing the industrialization and diversification of Africa’s economy.

Attention must also be given to the enabling environment that will lead to improvements in total factor productivity, such as the removal of tariffs and barriers to intra-state trade, and the construction of efficient infrastructure. Monetary policies must focus, not only on price stability, but on the development of the real sector and economic activities that increase employment generation. Infrastructure deficiencies are still high compared to other parts of the world. According to one recent estimate, Africa needs to invest US$31bn annually in order to bridge the infrastructure gap.

Equally important is Africa’s technology challenge. Business incubators and science parks, which are critical for growth, should be established in order to provide support for the information, communications, software, biotech, electronics, and precision machinery industries. Africa should take note of the Digital Hub, established in Ireland in 2003 as a knowledge-intensive innovation centre focused on digital content and technology research. This initiative made a significant contribution to Ireland’s recent dramatic economic growth.


This article was originally posted on West Africa Business Communities

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