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A new attempt at Africa's industrialization?

2017-04-25

Afrika is about ready. There are promising approaches for a sustainable industrialization. However, the path poses challenges to the continent.

The digital revolution will shape Africa's future. (c) Rainer Kwiotek/Zeitenspiegel/Menschen für Menschen

Helmut Asche

Professor Helmut Asche is an economist and sociologist. From 1985 to 1998 he worked as an economic advisor for GTZ. Until 2016 he taught as an honorary professor at the Department of Anthropology and African studies, University of Mainz.

The refugee crisis shed a completely new light on the issue of jobs in Africa

In most African countries, the majority of people work in agriculture. According to predictions of the future economic structure of sub-Saharan Africa, by far the largest number of new jobs – at least in rural areas – will also be in agriculture. Alongside this, employment opportunities are emerging in modern service sectors, especially the IT industry.

It seemed unrealistic for Africa to imitate the East Asian development model.

Less than 20 years ago, experts confidently described this combination of agriculture and services as typifying the trend of development on the African continent. Especially in the English-speaking world, academic papers that addressed the question of ‘should Africa industrialise?’ regularly concluded that it should not and recommended instead that it should leapfrog the industrial age. This leapfrogging would involve omitting an entire economic sector – that of manufacturing – and moving directly into an agriculture-cum-service age. It seemed unrealistic for Africa to imitate the East Asian development model. This way of thinking completely excluded a specific industrial policy that could have boosted the faltering development of industrial productivity. There was too deep-seated a memory of the grandiose attempts of Latin America and Africa to bring about industrialisation through state-owned companies operating behind high tariff walls – endeavours that with some exceptions resulted mainly in the production of white elephants.

There has been a radical paradigm shift here – and it has occurred not just since the refugee crisis shed a completely new light on the issue of jobs in Africa but in fact some years before that. New studies of structural change and employment trends in Africa have shown that continuation of the present trend – involving job growth in the private and public service sectors and to some extent in agriculture – will not create anywhere near the number of jobs needed to absorb the up-and-coming cohorts of young people looking for work. The demographic window of opportunity will quickly snap shut again. Extrapolated scenarios highlight the need for a radical game change – which will not happen without energetic political support. Alongside manufacturing industry as a driver of job creation, industrial policy thus once again takes centre stage in the development policy debate. Also on the agenda now are the new challenges of economic and environmental sustainability. The belching smokestack phase of catch-up industrialisation is no longer a realistic option, in Africa or elsewhere. A paradigm shift is therefore needed on no fewer than three fronts. The task facing a ministry of trade and industry that is responsible for coordinating this process with the private sector could not be harder.

Planning has become harder rather than easier

However, there is at least some clarity with regard to the practical essentials of modern industrial policy – namely a joint search for industrial opportunities by the public and private sectors, and selective promotion with clear time horizons, feedback loops and public control (see: PEGNet Policy Brief). What is far less clear in theoretical terms is which industrial sectors the economic latecomers among the developing countries should focus on. This is a result of the heuristic disposition of modern industrial policy, which has elevated collective self-discovery in a world of complex inter- and intra-industry division of labour to the status of a principle. Patterns of growth are generally more diverse than they were in earlier industrial periods. The classical sequence of industrialisation – typically from light to heavy industry – is not one that developing countries can readily pursue. Rational planning in the context of modern industrial policy has thus become harder than in the past rather than easier.

Of course even in such a scenario many agriculture-related jobs will still be created, for example in agroindustry or in the processing of agricultural commodities such as textiles and leather. The situation benefits from the fact that the paradigmatic flying geese of labour-intensive industrialisation, which originally took off in Japan, moved westwards from China a long time ago. However, an economy as a whole does not learn much from the establishment of mature labour-intensive industries. In Africa – as elsewhere – job creation is not the same thing as knowledge creation. An economic policy that promotes dynamic industrial networks must aim at both. With deliberate reference to the processors contained in our computers, I have termed this the ‘dual core’ of modern industrialisation strategies. In practice it is South Africa’s partially successful industrial policies that provide the closest example.

Many of these trends cannot be confidently predicted for Africa – and this uncertainty extends to the promise held out by the digital revolution. IT-saturated sectors are one of the principal areas in which leapfrogging is actually taking place; it can be observed in the skipping of the landline telephone stage and the development of innovative banking services. Startups focusing on the development of software and IT-based services are blossoming in Africa. By contrast, there is as yet no clear picture of how developing regions will be affected by the new risks to classical industrial employment that arise from the spread of the Internet of Things and what Germany has termed ‘Industry 4.0’. We do not know precisely what the ultimate effect of the digital revolution in Africa will be.

Let’s stick to the subject of leapfrogging. The second sector that is coming up with innovative technical solutions in Africa is renewable energy: off-grid solar systems are particularly promising and combinations of off-grid and on-grid solutions will no doubt take off soon. As in the field of telecommunications, the systemic failure of large-scale networks in Africa is being creatively bypassed and the outcome is a growing contribution to sustainable economic development as defined by the SDGs. In any case, it has now become clear that – contrary to the theories of old-fashioned development economics – leapfrogging relates not to the skipping of industrialisation in general but to progressive leaps forward geared to sustainable and inclusive solutions within particular industries and services. However, the African energy policy debate is still a long way from coming down on the side of sustainability. Large coal-rich countries such as Mozambique, Nigeria and South Africa face a complex public choice, at least for a transitional period in their development: should they rely entirely on renewable energies or go for an energy mix for the time being?

Some researchers say that in view of the global trade in tasks, African companies should focus on individual work processes and not on the establishment of entire industrial sectors.

Equally unclear is the outlook with regard to industrial division of labour. Promoting the participation of African producers in global and regional value chains is one of the new development cooperation mantras. Some researchers say that in view of the global trade in tasks, African companies should focus on individual work processes and not on the establishment of entire industrial sectors. Yet despite recent descriptions of the great unbundling of concentrated industrial production, we are now witnessing a trend towards re-agglomeration of important industrial sectors. Does it make sense after all to have a fully integrated textile chain in Ethiopia, or at least in a regional community? It is hard to advise developing countries on this point. In view of these uncertainties, which can only be reduced by a structured public-private dialogue with practical iteration loops, and also on account of the notorious political and economic risks – corruption, clientelism and so on – modern industrial policy in developing countries is one of the most challenging areas of policy. Many countries will be unable to deal with it, especially as there are a couple of other problem areas that also come into play.

One of the most exciting development policy challenges for some time to come

Promotion of industry is particularly difficult in a group of countries that should be able to fund it themselves: countries that are rich in mineral resources. After decades of discussion of the ‘resource curse’ and the Dutch disease, development economists still have no more than a vague idea of how to deal with the structural disadvantage of agriculture and the manufacturing sector.

And, finally, there is the issue of the connection between industrialisation and regional integration. One aspect of this is the fact that, for reasons of economies of scale, a whole range of industries depend on large connected markets. At the same time, successful regional integration requires the relatively balanced industrialisation of member states, and that is even harder to achieve politically. Promoting regional value chains does not automatically have a balancing effect. In consequence, both industrialised and developing countries often fall for the idea of pursuing an industrial policy that hits out at their own regional association. Whether it is ‘Buy American’ at the expense of NAFTA or ‘Buy Ugandan’ at the expense of the EAC, it is always a problematic policy, to put it mildly. The links between agricultural, industrial and trade policy are in any case uncertain territory. For all these reasons, the list of African countries that have actually pursued a successful industrial policy in particular sectors is very short: Botswana, Ethiopia, Mauritius, Rwanda and South Africa. And there is not a single oil producer among them.

One can also have a positive take on this: sustainable industrialisation is going to remain one of the most exciting development policy challenges for some time to come, and Africa is full of imaginative initiatives in this field.

Go back

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A contribution by GIZ

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A World Resources Institute project

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Human Rights, Land and Rural Development

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How can the private sector prevent food loss and waste?

An interview with David Brand (GIZ)

From a circular food system in Rwanda to functioning cooled transports in Kenya: The lab of tomorrow addresses development challenges such as preventing food loss and waste

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A contribution by GIZ

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Investing in Healthy Soils: Curse or Blessing?

A Contribution by WWF

How investing in healthy soils provides incentives for more sustainable agriculture even as it demonstrates the need for far reaching changes in the agrisector.

Successful Blueprints for African Agriculture

A Contribution by GIZ

At the 8th German-African Agribusiness Forum (GAAF) representatives from business and politics discussed successful investment models to improve living conditions in Africa.

Together towards Sustainable Development: Private Sector Cooperation

A Multimedia-Toolbox by GIZ

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The human finca

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Interview with Arif Husain (WFP)

The United Nations plan a Food Systems Summit - and now the Corona-Virus is dictating the agenda. The Chief Economist of the UN World Food Programme takes stock of the current situation: a conversation with Jan Rübel about pandemics, about the chromosomes of development - and about the conflicts that inhibit them.

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Interview with Reiner Klingholz

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New campaign for women: "Poverty is sexist"

Interview with Stephan Exo-Kreischer

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The Big Bang is possible

Interview with Joachim von Braun

Happy youngsters in rural areas, green development and the connection to the digital age – professor Joachim von Braun believes in this future sceneraio for Africa. For three decades the agricultural scienties has been researching how politics can create prosperty on the continent.

More than just a seat at the table

A contribution by Welthungerhilfe

Africa is home to the world’s youngest and fastest growing population. For many young people, agriculture could offer a job perspective. But to improve the living conditions and job prospects of young people in rural areas, political reforms and investments are desperately needed, as these people will be at the centre of agriculture and agricultural development in the future.

An opportunity for the continent

A contribution by the Bill & Melinda Gates Foundation

Africa’s population is young and ready to take its destiny into its own hands. Agriculture offers amazing opportunities in this regard. The Bill & Melinda Gates Foundation wants to support the next generation in this way.

Do we have to dare a new food system?

A contribution by Dr. Felix zu Löwenstein (BÖLW)

Lack of seasonal workers and virus explosion in slaughterhouses, rising vegetable prices, climate crisis – all this demonstrates: Our food system is highly productive and (at least for the rich inhabitants of planet earth) guarantees an unprecedented rich and steady food supply - but it is not resilient.

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Later on you want to become a farmer yourself, or would you prefer to take up another profession? Two young people from Burkina-Faso talked to representatives of the Dreyer Foundation about their parents' farms, the profession of farmer and their own plans for the future.

An investment in Africa's future

A contritbution by Essa Chanie Mussa (University of Gondar)

Rural youth need viable livelihood opportunities to escape out of poverty and realize their aspirations. How could they be helped to fully unleash their potential? This is an aloud call that needs novel strategies among governments, policy makers, and international development partners and donors.

“They said: You can do it”

A contribution by Bread for the World

As President of the IABM cooperative in Muhanga, Alphonsine Mukankusi is not simply focused on the figures. She has learned how to deal with people and how to take on responsibility. At the same time, her work helps her to come to terms with the past

Read more “They said: You can do it”

"Extreme is the new normal"

A report by Alexander Müller and Jes Weigelt (TMG)

As the climate changes, the population of Africa is growing and fertile land and jobs are becoming scarcer. New ways are currently leading to urbanisation of agriculture and a new mid-sized sector in the countryside

How do you campaign “Food Systems”?

Interview with Paul Newnham, Director of the SDG 2 Advocacy Hub.

The UN Food Systems pre-Summit in Rome dealt with transforming the ways of our nutrition. How do you bring that to a broad public? Questions to Paul Newnham, the Director of the Sustainable Development Goal (SDG) 2 Advocacy Hub.

UNFSS Pre-Summit: What did it achieve?

Interview with Martina Fleckenstein (WWF), Michael Kühn (WHH) and Christel Weller-Molongua (GIZ)

After the summit means pre-summit: It was the first time that the United Nations held a summit on food systems. Martina Fleckenstein, Michael Kühn and Christel Weller-Molongua reviewed the situation in this joint interview.

How Can We Feed The World in Times of Climate Change?

A Contribution by Jan Grossarth

Genetically modified bacteria become edible proteins, cows graze on pasture, and no waste is produced in an industrial circular economy. Journalist Jan Grossarth sees a silver lining for the future of world nutrition

Youth Employment in Rural Areas

The world’s population keeps on growing; with this rise comes an increased need for food as well as productive employment opportunities. Offering young people in rural areas better employment prospects is one of the objectives of the sector project. The young population is the key to a modern and efficient agricultural economy.

A project of GIZ

Digitalization: The Driving Force in the Future of Agriculture?

A Contribution by GIZ

At the ICTforAg conference in March 2022, the digital agriculture community exchanged on the challenges and opportunities associated with the next green revolution.

German G7 Presidency – fighting hunger with all our might

A Contribution by Welthungerhilfe

In the run-up to the G7 summit, experts from politics and civil society discussed sustainable and more effective options for action by the G7 states to combat hunger.

‘Invite yourself’ – Farmers organisations as key stakeholders of food systems

A Contribution by Andreas-Hermes-Akademie

The Andreas Hermes Academy (AHA) discusses the transformation of food systems with 30 representatives of farmers organisations.

What does it take to truly shift the paradigm on food systems?

An Interview by GDPRD

Why are short- and long-term responses important to address current and future global crises? Sebastian Lesch, Head of the Agriculture Division at the German Federal Ministry for Economic Cooperation and Development (BMZ), provides answers to these and other questions in an interview with the Global Donor Platform for Rural Development (GDPRD) and explains how much Germany welcomes all donors pulling together and acting in concert.

Sustainable, feminist and socially just: The new Africa strategy of the BMZ

A contribution by Prof. Dr. Anna-Katharina Hornidge

In the video format "#99SecondsWith" of the German Institute of Development and Sustainability (IDOS), Prof. Dr Anna - Katharina Hornidge talks about the new Africa-Strategy of the Federal Ministry for Economic Cooperation and Development (BMZ).

"Pandemic increases violence against women"

Interview with Léa Rouanet

African countries still face huge gender gaps in terms of access to work and capital. What are the consequences of Corona for women in Africa? Jan Rübel interviewed Léa Rouanet on lockdowns and gender-based violence. The economist works at the Africa Gender Innovation Lab of the World Bank.

5 Questions for Gunther Beger (BMZ): What must be done?

Interview with Gunther Beger (BMZ)

How much will it cost to sustainably end world hunger by 2030? This question was posed by the German Federal Ministry for Economic Cooperation and Development (BMZ) that commissioned two research teams with finding an answer. The results of the studies will be presented on October 13 in the run-up to World Food Day.

'It has never been more possible'

Interview with Carin Smaller (Ceres2030)

Over a period of two years, the Ceres2030 team spent researching answers to the questions of how much it will how much it will cost to realize SDG 2 and where that money should be spent most effectively. IISD Senior Advisor and Ceres2030 Co-director Carin Smaller about small farmers, machine learning and women empowerment.

Is the international community still on track in the fight against hunger?

Interview with Miriam Wiemers (Welthungerhilfe)

The Global Hunger Index (GHI) 2020 shows that the world is not on track to meet the international goal of “zero hunger by 2030”. If we continue at our current speed, around 37 countries will not even have reached a low hunger level by 2030.

"Agricultural research unties the Gordian knot"

Interview with World Bank Vice President Voegele

The CGIAR agricultural research organization is systematically repositioning itself. We spoke with Juergen Voegele, Vice President for Sustainable Development at the World Bank, about progress to date - and discuss what needs to be done collectively to stop global hunger in ten years.

GFFA 2021 focussed on climate and COVID-19

A report by David Sahay (Zeitenspiegel)

110 speakers from 120 countries met virtually at the Global Forum for Food and Agriculture (GFFA) to discuss the challenges to global food supply. They asked the question: How can food systems support the health of people and the planet?

“We have to prepare for the unexpected”

Interview with Dr Maria Flachsbarth (BMZ)

In August, Germany’s development ministry set up a division concentrating on One Health topics. Parliamentary State Secretary Maria Flachsbarth on knowledge gaps at the human-animal-environmental interface, the link between One Health and food security, and lessons learnt from previous pandemics.

5 Questions for Jann Lay: What is Corona doing to the economy?

Interview with Jann Lay (GIGA)

The Corona pandemic is hitting economies around the world very hard - but developments in African countries are quite diverse. There are different speeds, resiliences and vulnerabilities. What are the reasons for this? Apl. Prof. Jann Lay of the GIGA Institute provides answers.

"Farmers are smart"

Interview with Maria Andrade

From the lab to the masses: Maria Andrade bred varieties of biofortified sweet potatoes which are now widely used all over the continent. She sets her hope on the transformation of African agriculture.

Leveraging investment impacts

A contribution by Heike Baumüller, Christine Husmann, Julia Machovsky-Smid, Oliver Kirui, Justice Tambo

Any initiative whose aim is to reduce poverty in Africa should focus first on agriculture. But what kind of investment has the greatest impact? The use of scientific criteria provides some answers.

Small-scale farmers’ responses to COVID-19 related restrictions

A study by SLE

The lockdown due to COVID-19 hit the economy hard - including agriculture in particular with its supply chains and sales markets. What creative coping strategies have those affected found? The Seminar for Rural Development has begun a research study on th

"We must mobilise all available resources"

A contribution by Ismahane Elouafi (ICBA)

Freshwater deficits are affecting more and more people throughout the world. In order to counter this, our global food system will have to change, our author maintains. A case for more research on alternative crops and smart water solutions.

ONE WORLD no hunger - Meet the people driving rural transformation

A program by the partners of the special initiative One World no Hunger

The future is rural. On September 24, meet leaders and visionaries from Africa and South Asia who will enter into dialogue with european key actors.

Join uns here to meet the people.

The Rice Sector in West Africa: A Political Challenge

New insights on trade and value addition in the rice sector in West Africa

Low import tariffs, smuggling activities, unpredictable tax exemptions and weak enforcement of food safety standards: The potential of local rice value chains is undermined in West African countries.

City, Country, Sea: 6 Innovations in the Fight Against Climate Change

A listicle for climate-neutral agriculture

Vertically growing plants, magnetic cotton. Hairy leftovers fertilizing fields, tractors running on algae? These six innovations could lead agriculture’s next Green Revolution!

What is Our Food Worth to Us?

A Contribution by the TMG Think Tank for Sustainability

Towards integrated accounting standards in the food and farming sector with the help of True Cost Accounting (TCA).

COVID-19 and Rising Food Prices: What’s Really Happening?

A Contribution by IFPRI

Taking a look at the data (as of February 11th 2022) what the current price hike means for world hunger and what can be done to prevent from another food crisis.

A New Mindset to Reform Agriresearch

A Contribution by Lennart Woltering (CGIAR)

In context of the 15th CGIAR System Council Meeting, Lennart Woltering shares his assessment of the ongoing One CGIAR reform process.

Diversity Is the Fundamental Principle to Use

An Interview with Shakuntala Thilsted

A conversation with aquatic researcher Shakuntala Thilsted on the long-neglected nutrition benefits of aquatic diets and the empowering qualities of a sustainable aqua-food systems transformation.

For a just transition to a sustainable planet we must secure land rights

A contribution by TMG

At the UNCCD COP15, the Töpfer Müller Gaßner Think Tank (TMG) hosted four side events. The agenda of the kick-off event included discussions for the Human Rights and Land Navigator.

The lessons learned from the last food crisis - A solution?

A Contribution by Agnes Kalibata

Inadequacy and fragility of food systems becomes more apparent with every food crisis. The question we must answer is “Where do we go from here?”

Food security is more than production volumes and high yields

A Contribution by Adrian Muller, Catherine Pfeifer and Jürn Sanders (FiBL)

Taking Biodiversity Focus Areas under production or abandoning lower yielding, more extensive production systems is the wrong approach to mastering the looming global food crisis, say the authors of the Research Institute of Organic Agriculture (FiBL).

Water may offer the only chance

Interview with Caroline Milow and Ramon Brentführer

Groundwater resources remain dormant in the soil of African regions. Where does it make sense to use them – and where does overexploitation of nature begin? Caroline Milow (GIZ) and Ramon Brentführer (BGR) talk about potentials in the future and lessons from the past.

"Soy can be made into more than just flour"

A report by Johanna Steinkühler (GIZ)

The soybean is a natural crop that can be used to make a lot of food. So, Tata Bi started a small processing business first on her own, then with a few other women, which provides the women with an additional source of income year-round besides selling the soybeans.

"Without peace, there will be no development"

Interview with Karina Mroß (DIE)

What contribution does development cooperation make to conflict prevention? What can it do for sustainable peace? Political scientist Karina Mroß talks to Raphael Thelen about post-conflict societies and their chances for peaceful development.

Spiritual mortar for the young generation

A contribution by Jan Rübel

Fred Swaniker is working building a new era of leaders. And what about agriculture? ‘It needs to be more sexy!’

The 'Grey Gold'

A contribution by Maria Schmidt (GIZ)

The Cashew Council is the first international organisation for a raw material stemming from Africa. The industry promises to make progress in processing and refining cashew nuts - and answers to climate change

No rainforest for our consumption

A contribution by Jenny Walther-Thoß (WWF)

In the tropics rainforests are still being felled for the production of palm oil, meat and furniture. It is high time to act. Proposals are on the table.

Sustainable Artisanal Fisheries and Aquaculture in Rural Areas

Fish is important for combating malnutrition and undernourishment. But it is not only notable for its nutritional value, but also secures the livelihoods and employment for 600 million people worldwide.

A Project of GIZ

Achieving more together – New forms of cooperation for sustainability in the cotton sector

A Contribution by Saskia Widenhorn

Saskia Widenhorn, Head of the Cotton Component in Cameroon and the Sub-Saharan Cotton Initiative at GIZ, reports on the Bremer Cotton Week, which brought together international industry experts. The agenda included supply chain transparency, sustainability and new forms of cooperation between the private sector and partner countries.

Youth as key actors for a transformation of agri-food systems

Five Questions for Anke Oppermann

In October, the Committee on World Food Security (CFS) adopted policy recommendations ‘Promoting Youth Engagement and Employment in Agriculture and Food Systems’. Anke Oppermann answers five questions on youth employment in the agricultural sector.

Priscilla Impraim and her chocolate business

A contribution by Jan Rübel

Priscilla Impraim is one of the first women in Ghana to enter the chocolate business. Despite some hurdles, she founded the company Ab Ovo Confectionery Limited in 2006 with currently six permanent employees and 25 seasonal employees.

Why organic is a „blessed” method

An Interview by Claudia Jordan

Three female entrepreneurs from Mozambique, Sri Lanka and Uganda tell their stories about starting organic businesses from scratch, now selling Baobab Oil, Gotukola powder and Shea butter in international markets. And they explain why their business is almost 100 percent female.

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A new attempt at Africa's industrialization?

The refugee crisis shed a completely new light on the issue of jobs in Africa

Planning has become harder rather than easier

One of the most exciting development policy challenges for some time to come

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