Book contents
- Frontmatter
- Contents
- List of Illustrations
- Foreword
- Preface
- Abbreviations
- Introduction
- 1 Understanding the Pathways of Africa's Economies
- 2 Growth Pathway: Skipping the Industrial Phase in Africa
- 3 Losing the Urban Advantage
- 4 Pathways to Productivity Growth in Africa
- 5 Pathway to Employment Creation
- 6 Pathways of Urban Living Standards
- 7 Conclusions and Recommendations: Mapping Africa’s Growth Pathways
- References
- Index
1 - Understanding the Pathways of Africa's Economies
Published online by Cambridge University Press: 30 April 2020
- Frontmatter
- Contents
- List of Illustrations
- Foreword
- Preface
- Abbreviations
- Introduction
- 1 Understanding the Pathways of Africa's Economies
- 2 Growth Pathway: Skipping the Industrial Phase in Africa
- 3 Losing the Urban Advantage
- 4 Pathways to Productivity Growth in Africa
- 5 Pathway to Employment Creation
- 6 Pathways of Urban Living Standards
- 7 Conclusions and Recommendations: Mapping Africa’s Growth Pathways
- References
- Index
Summary
Introduction
Africa's economic growth pathways are being shaped by three powerful drivers that are linked together in very complex ways, namely, industrialization, urbanization and ST. However, Africa's industrial evolution, as well as urbanization dynamics, tends to not follow conventional wisdom. While some countries are clearly skipping the industrial phase, with their economic growth being led by the services sector, others have deindustrialized over time. These three drivers in turn significantly influence and shape the speed and quantum of three highly desired outcomes, namely, economic growth, employment and living standards.
According to the African Development Bank (AfDB, 2019), economic growth in SSA was estimated at 2.3 percent for 2018. This was down from 2.5 percent in 2017, keeping economic growth below population growth for the fourth consecutive year. Although it was expected that regional growth would rebound to 2.8 percent in 2019, it remained below 3 percent since 2015 (World Bank, 2019). In 2016, when the continent's economic growth was projected to fall to 1.6 percent, non- oil producers recorded relatively strong GDP growth. The best- performing countries include Ethiopia, Rwanda, Côte d’Ivoire, Senegal and Tanzania. These countries escaped the volatility associated with the commodity crash and continued to grow at annual average growth rates of over 6 percent (World Bank, 2016).
The slowdown in aggregate economic performance has been a result of the weak performance of the region's largest economies, namely, Nigeria and South Africa, as their combined output is half that of the continent’s. This resulted from fall in oil prices from over $100 to less than $50 per barrel since mid- 2014, which affected Nigeria's GDP output combined with poor manufacturing output, due in large part to power outages, and in South Africa, the initial drop (which rebounded later) in mining and manufacturing output.
Clearly, poor diversification, especially in oil and mineral exporters in SSA, was a strong factor determining the evolutionary pathways of their growth. These countries have evolved as enclave economies in which factor endowments pattern the evolution of core institutions leading, for instance, to high- income inequalities, the rise of what one may describe as “consumption cities” where average income lags far behind cost of living. Enclave economies are created by a combination of local political interest and foreign investment in oil and mineral resources with a strong export orientation.
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- Information
- Resurgent AfricaStructural Transformation in Sustainable Development, pp. 11 - 26Publisher: Anthem PressPrint publication year: 2020