Manufacturing in Africa: an example from Zambia

Structural change in the development process usually involves the decline of agriculture and the rise of manufacturing. Structural change in Sub-Saharan Africa (and some other developing countries) has altered with agriculture declining as a share of GDP and total employment, but manufacturing as a share actually declining or remaining stagnant. It is argued in this paper that this is at least partly the result of liberalising reforms beginning in the late 1980s and partly the result of a significant dependence on a natural resource, in this case copper. However, it is further hypothesised in this paper that growth in agricultural productivity is critical to the development of manufacturing. Specifically, growth in this sector's productivity restrains the cost of agricultural goods and thus allows the manufacturing sector to expand. If agricultural productivity lags relative to manufacturing productivity rising relative agricultural costs make it extremely difficult for manufacturing to expand. These ideas are illustrated by examining the experience of Zambia.