Patterns of Growth and Structural Transformation in Africa

Peter Timmer, Margaret McMillan, Ousmane Badiane, Dani Rodrik, Fleur Wouterse, and Hans Binswanger-Mkhize

African economies have sustained a solid pace of growth for nearly two decades. This unprecedented performance in the continent’s history is a welcome change from the previous decades of stagnation and decline. So, how can Africa continue to accelerate economic transformation and broaden growth in the decades to come Solid stewardship of the future development agenda requires a good understanding of the factors shaping the growth process across the continent. More than the average rate of growth, the nature and patterns of structural change or the extent to which individual economies are successfully moving labor and resources into activities with high and increasing levels of productivity, is a much better gauge of future economic performance. 

The current recovery is masking serious future growth challenges that will have to be addressed for African countries to join the rank of middle-income economies. Two key issues are at the center of these challenges: (1) the modernization of smallholder agriculture and its integration into the fast-growing agribusiness chains that can capture the rapidly increasing demand for urban food, and (2) the renewal of industrialization strategies to promote entreperise creation and growth in the agribusiness and manufacturing sectors to raise the rate of labor absorption and productivity levels outside of agriculture.
This Thematic Research Note focuses on the process of structural change in Africa and other developing regions and draws useful conclusions for future development strategies among African countries.
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