Dignity factory workers producing shirts for overseas clients, in Accra, Ghana    Photo Credit: Dominic Chavez/World Bank


For a long time, the debate concerning the pathway to development in Africa has centred on industrialisation. In the quest for development in Africa, the question of how to industrialise has always been the mainstay. The quest for industrialisation started in earnest from the 1960s with policies that emphasised protectionism and import substitution, facilitated by heavy state intervention. Progressively, policy discourse shifted to free markets. Despite adherence to these contrasting development strategies by African countries at different points in time, Africa still remains the poorest, least industrialised continent in the world, plagued by extreme poverty and unemployment. This state of affairs has led some development experts to conclude that Africa’s development problems are as a result of a “poverty trap” which has engendered a “growth tragedy” which is the result of structural issues related to climate, geography, culture, history, etc. which are difficult to change. In essence, Africa is doomed to remain underdeveloped as these factors are difficult to mediate.

In this article however, I argue contrariwise. Industrialisation indeed is critical to Africa’s overall development as a result of the progressive integration of world economies through trade and Global Value Chains (GVCs). However, Africa’s inability to effectively industrialise its economies, and subsequently generate employment and reduce poverty levels is not the result of a “poverty trap”. It is rather the result of a lack of innovative and focused industrial policy that is specific to the African context. To establish a successful industrial economy, African countries have to establish not just industries but an industrial system/network developed firstly on dominant sectors of their economy, with linkages to human capital development and research.



Noman and Stiglitz (2012) and the Economic Commission for Africa (ECA) (2015) have contended that Africa’s inability to generate employment and end poverty is a result of its insignificant manufacturing sector as opposed to its primary commodity sector, particularly agriculture. A careful study of the patterns of industrialisation pursued by the now developed countries however shows that both sectors are equally important in the structural transformation process and that a reinforcing relationship between both is what is needed, not the desertion of one for the other. Moreover, industry is not just limited to manufacturing; a country’s industrial base must be centred on the dominant sector of its economy, which could be agriculture, manufacturing, services or a complementary combination of all. There should thus be the promotion of industries which have strong linkages with dominant sectors, acting as suppliers of inputs or buyers of outputs or both, with interconnections with other industries in order to promote sustainability.

African countries in general have a comparative advantage in the sectors of agriculture, natural resources and forestry and with the bulging youth population – labour. Specialising firstly in these sectors and developing labour intensive industries will allow African countries to create employment and maximise output in international trade. The first step toward sustainable and inclusive industrialisation is that the sectors of comparative advantage should determine which areas a country gives attention to in the development of its industrial policy. In this regard, a serial or progressive approach to industrialisation is the way forward. The focus should first be on developing such primary sectors by linking them with industry to supply inputs for increased production. This will demand that newly established industries are linked to agriculture, mining, forestry, etc. with a focus first on the production of low and medium manufacturing that will feed the primary sector and increase output, and consequently, the productive capacity of local industries in order to foster diversification in the economic structure of African countries. With agriculture for instance, which is the sector that employs the most people in Africa, industries should focus on serving as productivity promoters through the provision of productivity inputs, such as chemicals, fertilisers, pesticides, agricultural machinery and implements, services such as transport equipment, computer technology and warehouses, etc.  In Ghana for instance, though cocoa is the main agricultural export, accounting for 8.2% of the country’s GDP, production has progressively been declining. This decline has been attributed to low productivity as a result of the incidence of pests and diseases and lack of facilities such as electricity which causes migration of labour and consequently, shortage of labour supply, leading to high cost of labour. The establishment of industries that not only make use of cocoa output but supply inputs necessary for boosting cocoa productivity is critical in order to increase productivity and employment in the sector.

Additionally, there should be the active engagement of Small and Medium Enterprises (SMEs) in the advancement of sustainable industrialisation in Africa since they constitute a huge section of the African economy, providing employment to about 80% of the population. Manufacturing SMEs that are already in industries directly linked or complementary to the chosen dominant sector should be aided to restructure, upgrade and diversify through incentives such as access to credit, tax exemptions, subsidised infrastructural support, R&D, training for workers, etc. This will increase productivity, added value of SMEs and also encourage exports upgrade and diversification. In the agricultural sector for instance, SMEs that are already engaged in agro-processing activities such as garments, leather, food processing, etc. should be the target for incentives to encourage upgrade, expansion and the development of stronger links with smallholder famers. The garments industry for instance can lead to the establishment and expansion of complementary industries – textile and local weaving, fabric-processing and designing, tye-dye, fashion and design industries which will encourage expansion and diversification of the industry.

Industries should therefore not be established in isolation, without linkages and clusters that will enable them to take advantage of the benefits of agglomeration such as integration between producers and suppliers, producers and customers, innovation and knowledge spill overs, water, roads and electricity in order to promote sustainability in industrialisation. This was one of the main problems with Nkrumah’s industrial policies in Ghana, particularly, the footwear, meat and leather factories for which reason they collapsed, as reported by Acemoglu and Robinson (2012).

This insight moreover raises concerns regarding Ghana’s president, Akuffo Addo’s one district one factory policy, meant to kick start sustainable industrial development and employment in Ghana. Industries are not established by districts but around productive sectors that can generate complementary industrial clusters with strong linkages. It is better to establish a sustainable industrial hub in one district rather than to attempt to establish a factory in all districts in Ghana. Such a policy is doomed to fail in the long term.

Again and very importantly, there should be industry university collaborations that will facilitate research to advance technological upgrade, diversification and upgrade in industry in the dominant sector. A similar strategy was adopted by Brazil through the establishment of an agricultural research system that fostered the successful development of its agro-industry.

In essence, for sustainable, value-added and knowledge-based economies, industries cannot be developed in isolation of dominant sectors, human capital development and an effective research system. Establishing a research system together with complementary industrial clusters is pivotal to technological upgrade and value added production. This strategy also partly accounts for the success of Silicon Valley as a hub for start-ups and is a generic principle that must be adhered to for sustainable industrial development in Africa.



Most African governments are working on expanding education and building on the skill level of their populations. However, the gap is that there is little or no commensurate investment and growth in their local economies and little diversification of the structures of production into activities that are employment intensive.

However, a critical analysis of the African industrialisation experience thus far and a study of the development trajectory of the now developed countries, including the “East Asian Tigers” shows that successful industrial policy includes a wide range of targeted, coordinated and comprehensive mix of policies and not the mere establishment of industries. Countries like China, Brazil, Chile, United Arab Emirates (UAE), Malaysia, Taiwan, Singapore and South Korea all had comprehensive targeted industrial policies which account for their successful industrialisation and structural transformation (Chang, 2011). The recent growth of Ethiopia also testifies to the import of developing a network of industrial policies based on a dominant primary sector. Africa therefore needs a comprehensive system of industrial policies that are specific to the context of each country and which take advantage of dominant sectors, linkages, complementary industries and clusters.


The views expressed in this article are those of the author alone and not the Future Africa Forum.