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2 - Growth Pathway: Skipping the Industrial Phase in Africa

Published online by Cambridge University Press:  30 April 2020

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Summary

Introduction

Attempts at industrialization by all regions of the world hacks back to the success first of Great Britain, followed by Western Europe and thereafter North America during the nineteenth and early twentieth centuries. The academic literature seems to agree that although the early industrializing countries started out at different stages of growth, they followed more or less a similar format of change that led to their transformation. Marked by the shift from a subsistence/ agrarian economy toward more industrialized/ mechanized modes of production, the hallmarks of industrialization include technological advancement, widespread investments into industrial infrastructure and a dynamic movement of labor from agriculture into the manufacturing sector (Lewis, 1978; Romer, 1986; Todaro, 1989).

Broad consensus exists that a dynamic process of industrialization is fundamental to the overall economic development of countries, because it promotes growth- enhancing structural change, which is the gradual movement of labor and other resources from agriculture to manufacturing, as accompanied by increases in productivity. Manufacturing is central to ST because the degree of industrialization is related to the per capita income of countries. Given that productivity is higher in manufacturing than in agriculture, the transfer of resources into manufacturing should normally provide a basis for higher rates of productivity- induced growth structures. The nexus of industrial growth and urbanization is therefore vital to our understanding of economic growth and living standards in modern cities.

Typically, rural economies make far less demand on infrastructure, but in contradistinction to the agriculture- dominated rural societies, urban industrial settings demand more but yields higher development dividends because manufacturing pathway is a faster road to capital accumulation. This is particularly so in spatially concentrated manufacturing (cluster agglomeration) compared with spatially dispersed agricultural activities. Capital intensity is equally high for sectors linked closely to urban manufacturing such as mining, utilities, construction and transport and much lower in agriculture and services. Capital accumulation is one of the aggregate sources of growth; therefore, as the share of manufacturing rises, aggregate growth contribution increases.

Urbanization in developing countries typically is a mixture of wealth conjoining with a conundrum of sprawls, slums and sickness. Africa's current population stands at close to 1.2 billion, and will reach about 1.689 billion (16 percent of world total) by 2030 if we assume a growth rate of between 2.0 percent and 2.5 percent.

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Information
Resurgent Africa
Structural Transformation in Sustainable Development
, pp. 27 - 50
Publisher: Anthem Press
Print publication year: 2020

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