This book examines how light manufacturing can offer a viable
solution for Sub-Saharan Africa’s need for structural
transformation and productive job creation, given its potential
competitiveness based on low wage costs and an abundance of natural
resources that supply raw materials needed for industries. Based on
five different analytical tools and data sources, the book examines in
detail the binding constraints in each of the subsectors relevant for
Sub-Saharan Africa (SSA): apparel, leather goods, metal products,
agribusiness, and wood products. Ethiopia is used as an example, with
Vietnam as a comparator and China as a benchmark, and with insights
from Tanzania and Zambia used to draw out lessons more broadly for
SSA.
The book recommends a program of focused policies to exploit
Africa’s latent comparative advantage in a particular group of
light manufacturing industries – especially leather goods,
garments, and agricultural processing. These industries hold the
prospect of initiating rapid, substantial, and potentially
self-propelling waves of rising output, employment, productivity, and
exports that can push countries like Ethiopia on a path of structural
change of the sort recently achieved in both China and Vietnam. The
timing for these initiatives is very appropriate as China’s
comparative advantage in these areas is diminishing due to steep cost
increases associated with rising wages and non-wage labor costs,
escalating land prices, and mounting regulatory costs.
Five features of this book distinguish it from previous studies.
First, the detailed work on light manufacturing at the subsector and
product levels in five countries provide in-depth cost comparisons
between Asia and Africa that can be used as a framework for future
studies. Second, the book uses a wide array of quantitative and
qualitative techniques to identify key constraints to enterprises and
to evaluate firm performance differences across countries. Third, the
findings that firm constraints vary by country, sector, and firm size
led to a focused approach to identifying constraints and combining
market-based measures and select government intervention to remove
them. Fourth, the solution to light manufacturing problems cuts across
many sectors: solving the manufacturing inputs problem requires solving
specific issues in agriculture, education, and infrastructure. African
countries cannot afford to wait until all the problems across sectors
are resolved. Fifth, the book draws on experiences and solutions from
other developing countries to inform its recommendations.
This book will be very valuable to African policy makers,
professional economists, and anyone interested in the economic
development, industrialization, and structural transformation of
developing countries.
‘ Light Manufacturing in Africa yields excellent new
insights for African policy makers on how to grow industry and create
productive jobs. The book combines sound economic analysis with careful
and detailed micro and enterprise survey data to derive practical and
sensible policy recommendations for the African context. In particular,
the value chain analysis across countries on different continents
provides a deep and clear empirical understanding of the relative
costs, the priority constraints, and thus the policy interventions.
This book is a must-read for anyone interested in African development
and industrialization.’
— K.Y. AMOAKO, President,
African Center for Economic Transformation, Accra, Ghana
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