Evolving Patterns of Structural Change in Sub-Saharan Africa

Richard Grabowski

abstract
The traditional structural change process, as it has evolved in East and parts of Southeast Asia, has involved a shift of labor out of agriculture and into labor-intensive manufacturing. It has relied on political coalitions based on farmers and new manufacturing entrepreneurs to implement policy. However, this does not seem relevant to the situation in Africa. This is because labor in this region is not relatively abundant, and industrial technology is becoming more capital-intensive. As a result, in Africa, the dynamic relationship between manufacturing and agriculture has been significantly reduced or weakened, and development coalitions based on expanding manufacturing are likely to fail. The recent experience of Ethiopia suggests that structural change there initially involved a shift of labor into traditional services. This was driven by investment in agriculture and infrastructure services (transportation, communications, and trade), with productivity growing in both sectors, agriculture and traditional services. Thus, political coalitions in Sub-Saharan Africa seeking to successfully promote economic development would seem to require the incorporation of service sector entrepreneurs. As services develop, manufacturing may in the longer run become more viable as the rising productivity in traditional services enhances productivity in manufacturing.

Keywords
Structural change, Africa, Asia, Agriculture