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IZA Discussion Paper No. 16043
March 2023
Africa's Industrialization Prospects: A Fresh Look
Wim Naudé, Fiona Tregenna

This paper identifies the determinants of industrialization in 18 African countries, 1965 to 2018, using various estimators and applying a battery of robustness checks. Industrialization in Africa is driven by historical legacies such as colonialism; geographical factors such as rainfall and distance from international markets; economic factors such competition from China, market size and urbanization; and technological factors such as digital technology adoption. An inverse U-shape relationship between industrialization and GDP per capita is consistent with (premature) de-industrialization. Technological change and adoption of digital technologies are found to have an ambiguous relationship with industrialisation in Africa. The establishment of the AfCFTA is timely, but its benefits will only be realised if countries also improve infrastructure to overcome the negative consequences of adverse geography, improve trade facilitation to exploit learning-by-exporting from intra-African trade, and facilitate urbanization.

Communications
Mark Fallak
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+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
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Christina Gathmann
christina.gathmann@liser.lu

The IZA@LISER Network is a global community of scholars dedicated to excellence in labor economics and related fields, now coordinated at the Luxembourg Institute of Socio-Economic Research (LISER) following its transition from Bonn.

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