Manufacturing in structural change in Africa

We investigate the scale, causes and timing of significant episodes of industrialization and deindustrialization in Sub-Saharan Africa. Recent studies have argued that the turning point of manufacturing output and employment shares tends to occur “prematurely” in this region (Rodrik, 2016). We perform our analysis using panel data methods for fractional responses and data from a variety of sources for a panel of 45 African countries. Our results overwhelmingly do not support the common finding that Sub-Saharan Africa countries have begun to deindustrialize prematurely. Moreover, we document meaningful heterogeneity across subregions of Sub-Saharan Africa with the Southern region being the only subregion that witnessed limited deindustrialization. However, this deindustrialization of the southern subregion does not appear to be occurring prematurely. The study also explores the potential role of Dutch disease and resource-curse hypotheses in understanding Sub-Saharan Africa’s manufacturing experience in resource rich countries. We conclude that manufacturing remains a viable and reliable path towards structural transformation in Sub-Saharan Africa.