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Is sub-Saharan Africa deindustrializing?

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  • Mensah, Emmanuel B.

    (UNU-MERIT, Maastricht University)

Abstract

There is a general view that Africa is deindustrializing. We examine the extent to which the existing result is sensitive to sample size and new sectoral indicators. In addition to the usual linear fixed effect model, we use nonlinear panel data method that recognizes the fractional nature of manufacturing share of employment and output. We do not find convincing and robust evidence in support of the general view that Africa is deindustrializing prematurely. Manufacturing employment shares do not follow an inverse U-shape relationship. Conditional on income, population, and country-specific fixed effects, manufacturing output shares show positive and statistically significant trends over time. When we increase the coverage of countries to almost all countries in Africa, the results suggest that Africa is not deindustrializing, although there has not been any significant industrial development since the 1970s. This result masks important regional differences. A sub-regional analysis shows that East Africa is industrializing, whereas Southern Africa is the only region that seems to be deindustrializing. We examine the underlying drivers of manufacturing performance and discuss the implication for data collection and industrial policy in Africa.

Suggested Citation

  • Mensah, Emmanuel B., 2020. "Is sub-Saharan Africa deindustrializing?," MERIT Working Papers 2020-045, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2020045
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    Cited by:

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    2. Hagen Kruse & Emmanuel Mensah & Kunal Sen & Gaaitzen Vries, 2023. "A Manufacturing (Re)Naissance? Industrialization in the Developing World," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(2), pages 439-473, June.
    3. Nguimkeu, Pierre & Zeufack, Albert, 2024. "Manufacturing in structural change in Africa," World Development, Elsevier, vol. 177(C).
    4. Abdul A. Erumban & Gaaitzen de Vries, 2021. "Industrialization in developing countries: is it related to poverty reduction?," WIDER Working Paper Series wp-2021-172, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    Africa; de-industrialization; industrialization; industrial development; manufacturing; economic growth;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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