In the 20th century, Africa gained political independence but fell behind economic boom. In the 21st century, it is Africa’s turn – but not without stronger state and new external push.
After struggle against corruption, lawlessness and terror, President Buhari’s administration has outlined an economic recovery plan targeting 7 percent GDP growth rate from 2017 to 2020. While many African economies are hoping for takeoff in the coming years, Nigeria represents the region’s greatest economic potential.
For longer than a century, Africa’s economic miracle has been a pipedream. But things are changing.
Stronger state, different external actors
In the mid-2000s, after decades in the slow lane, African economies hit the accelerator. But what lies ahead for the continent is not an open highway, says Justin Yifu Lin, World Bank’s former chief economist, with co-author Andrea Goldstein. “If Africa is to achieve its potential as the next emerging-market engine of global economic growth,” the two write, “it will have to industrialize.”
But the devil is in the details.
Ever since Britain’s first Industrial Revolution, the rise of labor-intensive light manufacturing (textiles, garments, shoes, and associated tools and machinery) has played a major role in pushing up national incomes. However, as Africa has not managed to participate fully in industrialization since the 1970s, it has lagged behind the rest of the developing world.
Lin and Goldstein advocate a new catalyst role for government. They emphasize that an effective industrial policy must cover not just manufacturing but the kind of economic activities that support it. This means vital role for external actors, particularly for large emerging economies, such as China, that are able and willing to participate in African growth.
After three decades of economic stagnation and income polarization in the name of freedom and democracy, Lin and Goldstein are right to stress a different, more inclusive view of economic development.
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