UNCTAD Economic Development in Africa Report Calls for New Industrial Policy for Poverty Reduction
11 July 2011: The 2011 Economic Outlook for Africa, published by the UN Conference on Trade and Development (UNCTAD), stresses the need for a new industrial policy to induce structural transformation and engender development in African economies.
The report: examines the status of industrial development in Africa with a focus on African manufacturing; analyzes past attempts at promoting industrial development in the region and lessons learned; and offers policy recommendations on fostering industrial development in Africa under conditions of changing international trade rules, growing influence of industrial powers from the South, the internationalization of production, and increasing concerns about climate change.
The report finds that manufacturing plays a limited role in Africa while its share in GDP varies substantially among African countries. Furthermore, Africa is: losing ground in labour-intensive manufacturing, while making some progress in boosting technology intensive manufacturing; remains heavily dependent on resource-based manufacturing; and has a manufacturing sector that is dominated by small and informal firms.
The report recommends that African countries should intensify efforts to develop manufacturing to realize its opportunities for sustained growth and poverty reduction based on a strategic approach to industrial policy making. It proposes a framework for industrial strategy design that takes account of the heterogeneity of African economies and is also tailored to country specific circumstances, based on elements such as fostering scientific and technological innovation, promoting entrepreneurship, and improving government capabilities.
Such activities should be supported by economic policies that ensure development results, including: avoiding exchange rate overvaluation; appropriate monetary and fiscal policies; and enhancing resource mobilization. In addition, the report recommends strengthening regional integration and maintaining political stability in Africa to provide a robust and stable market environment to unlock Africa's manufacturing potential. [UNCTAD Press Release][Publication: Economic Development in Africa Report 2011]