Building Economic Complexity in Africa

Despite the dominant theme over the last decade of ‘Africa Rising’, it is evident, with some hindsight of course, that much of the growth spurt in Africa has been on the back of the super-cycle in global commodity prices. Indeed, evidence shows that fourteen of the seventeen high-growth economies in Africa over the period 2008-2013 were resource-dependent economies (Bhorat & Tarp, 2016; Bhorat, Naidoo & Stanwix, 2016; Bhorat, Steenkamp & Rooney, 2015). The long-run growth and development literature does, in turn, retain the view that for a pattern of structural change and inclusive growth to assert itself in an economy, two key inter-linked ingredients are required. These are firstly, the move from a low productivity agricultural sector to a high productivity, export-oriented agricultural sector. Secondly, and with some overlap, the development of a dynamic high productivity manufacturing sector that is both employment- and export-intensive in nature. In both these channels the generation of employment opportunities for a large share of the population – in particular young people – drove this structural change. The economic imperative of structural change that is driven by manufacturing-led industrialisation, and the jobs that emerge from such a process, is also increasingly important within the context of Africa’s expected future population growth. According to the UN World Population Division (2018), Africa accounted for 13.69 percent of the world’s working-age population in 2015, but this number is projected to grow to 42.55 percent by the year 2100.1 This then necessitates a view to drafting and creating policies that focus on creating employment opportunities for this emerging working-age population, particularly women and youth, while concurrently meeting development and growth goals. This paper provides a synthesis of four country case studies on Ghana, Kenya, Senegal and South Africa.2 These studies examine structural change through the lens of economic complexity, and provide policy options through which these countries can achieve structural change that expands the economic opportunities for disenfranchised women and youth.3 The common objectives across these four studies is as follows: First, to examine the degree and extent of economic complexity of the country in question. Second, to undertake a detailed product space analysis.