A cross-sectional analysis of industrialization and growth in Africa

Ibbih JM and Gaiya BA

Abstract

Industrialization, particularly manufacturing, has been identified as an engine of growth. The industrial revolution and the dynamic growth of East Asian economies attest to this. The paper finds that the structure of industry in most African economies, with the exception of the Southern African economies and the Eastern African economies, are geared more towards mining and utilities industries rather than manufacturing which is more growth stimulating. Based on the Lewis –Kaldor theoretical framework, this paper employs cross sectional analysis of 54 African countries to draw the linkages between industrialization and growth. The regression analyses confirm the relationship between industrial development and economic growth. However, industrial development on the African continent has no transfer effects across member countries. Policy attention should therefore focus on manufacturing and the domestic private sector.