Green Industrial Policy and Industrialisation in Africa

The paper examines Africa's challenges and prospects of green industrial policy and industrialisation. Green growth and carbon-neutral industrialisation are vital for African economic transformation, and a sustainable industrial policy is central to achieving these goals. Yet African countries have to accelerate economic transformation and pursue a green transformation path with limited resources and a low base of technological capability. Furthermore, the design and practice of green industrial policy and decarbonisation pathways are more complex than often thought. This paper first sets out conceptual perspectives on green industrial policy. It examines the evidence for and lived experience of progress and challenges in greening African economic development through selected comparative case studies of industrial policy practices. Second, the paper focuses on three strategic complementary priorities for green industrialisation: (a) developing low-carbon industrial hubs to accelerate decarbonisation and the building of green manufacturing, (b) prioritising the expansion of diverse forms of renewable energy, including hydropower, which has strong spillovers and is a significant African endowment, and (c) investing in research and innovation capability from the early stage of development. Third, it argues that carbon-neutral industrialisation is a protracted and the only prospective path to achieving the dual goals of accelerating structural change and achieving its ambition of net zero emissions. Nonetheless, green growth has a broader scope and necessitates more decisive developmental roles of the state in an increasingly complex and competitive landscape. Policy learning from the continent’s experiences, and from those emerging economies that pursue green growth, could provide valuable lessons to accelerate the process.