{"id":21713,"date":"2026-08-09T15:36:12","date_gmt":"2026-08-09T15:36:12","guid":{"rendered":"https:\/\/qiraatafrican.com\/en\/?p=21713"},"modified":"2026-08-09T15:36:12","modified_gmt":"2026-08-09T15:36:12","slug":"why-african-countries-must-rethink-how-they-grow-their-economies","status":"publish","type":"post","link":"https:\/\/qiraatafrican.com\/en\/21713\/why-african-countries-must-rethink-how-they-grow-their-economies\/","title":{"rendered":"Why African countries must rethink how they grow their economies"},"content":{"rendered":"<p>By <em><strong>Jonathan Munemo*<\/strong><\/em><\/p>\n<p>&nbsp;<\/p>\n<p>The prolonged disruption of shipping\u00a0<a href=\"https:\/\/blogs.worldbank.org\/en\/opendata\/strait-of-hormuz-disruption-sends-oil-prices-surging\" target=\"_blank\" rel=\"noopener\">through the Strait of Hormuz<\/a>\u00a0has exposed how vulnerable Africa\u2019s economies are to geopolitical shocks. Fuel prices have remained elevated, squeezing economies that\u00a0<a href=\"https:\/\/theconversation.com\/when-global-trade-becomes-a-weapon-how-can-african-economies-protect-themselves-284321\" target=\"_blank\" rel=\"noopener\">depend heavily on petroleum imports from the Middle East<\/a>. These include Ethiopia, Kenya, Mozambique, South Africa, Tanzania and Uganda.<\/p>\n<p>This vulnerability also puts at risk the continent\u2019s push to escape poverty through what economists call\u00a0<a href=\"https:\/\/www.worldbank.org\/en\/news\/press-release\/2021\/11\/23\/policies-targeting-integration-into-global-value-chains-key-to-harnessing-the-potential-of-industrialization-in-africa\" target=\"_blank\" rel=\"noopener\">structural transformation<\/a>: moving workers from low-productivity activities such as subsistence farming into more productive jobs in manufacturing and modern services.<\/p>\n<p>The continent never fully participated in the export-manufacturing wave that transformed East Asia from the\u00a0<a href=\"https:\/\/openknowledge.worldbank.org\/server\/api\/core\/bitstreams\/334a22f2-dd9c-5fc7-8c6e-0082fc121215\/content\" target=\"_blank\" rel=\"noopener\">1960s onward<\/a>. And now Africa\u2019s industrialisation ambitions have become even more difficult to realise as geopolitical rivalry, fragmented supply chains and artificial intelligence reshape the global economy.<\/p>\n<p>As an\u00a0<a href=\"https:\/\/www.salisbury.edu\/faculty-and-staff\/jxmunemo\" target=\"_blank\" rel=\"noopener\">economist<\/a>\u00a0who has written about how\u00a0<a href=\"https:\/\/theconversation.com\/when-global-trade-becomes-a-weapon-how-can-african-economies-protect-themselves-284321\" target=\"_blank\" rel=\"noopener\">weaponisation of global trade affects African economies<\/a>, I believe structural transformation still matters. But it must be reinvented around four priorities:<\/p>\n<ul>\n<li>larger markets<\/li>\n<li>reliable electricity<\/li>\n<li>Africa\u2019s comparative advantages<\/li>\n<li>agriculture.<\/li>\n<\/ul>\n<h2>Why the old model worked<\/h2>\n<p>Japan, South Korea, Taiwan, China and Vietnam all\u00a0<a href=\"https:\/\/www.worldbank.org\/en\/region\/afr\/publication\/industrialization-in-subsaharan-africa-seizing-opportunities-in-global-value-chains\" target=\"_blank\" rel=\"noopener\">industrialised in broadly the same way<\/a>. They expanded exports of labour-intensive manufactured goods such as garments, footwear, furniture and electronics. These industries created millions of jobs for workers with limited formal education while gradually building technological capabilities, productive firms and efficient logistics networks.<\/p>\n<div class=\"slot clear\" data-id=\"17\">\n<div class=\"promo\">\n<div class=\"bg-gray-50 text-gray-900 rounded-sm pt-3 pb-5 px-4 bg-gray-50 transition-colors duration-300 mb-4\" role=\"complementary\" aria-label=\"Promo\">\n<h3 class=\"font-sans-heading mb-2 text-lg font-semibold break-words text-gray-800\">The edge you\u2019ve been looking for. Receive daily expert analysis<\/h3>\n<\/div>\n<\/div>\n<\/div>\n<p>What made this possible was a relatively stable global trading system. Trade barriers generally fell, demand for manufactured goods expanded, and richer countries steadily moved out of low-wage industries as incomes increased. Governments could focus on becoming more competitive because the rules of international trade were comparatively predictable.<\/p>\n<p>Africa never fully benefited from that opportunity.\u00a0<a href=\"https:\/\/data.worldbank.org\/indicator\/NV.IND.MANF.ZS?locations=ZG\" target=\"_blank\" rel=\"noopener\">Manufacturing accounts for only about 10% of GDP in sub-Saharan Africa<\/a>, compared with around\u00a0<a href=\"https:\/\/data.worldbank.org\/indicator\/NV.IND.MANF.ZS?locations=Z4\" target=\"_blank\" rel=\"noopener\">22% in East Asia and the Pacific<\/a>. The continent\u2019s share of global manufacturing has fallen from\u00a0<a href=\"https:\/\/futures.issafrica.org\/thematic\/07-manufacturing\/\" target=\"_blank\" rel=\"noopener\">roughly 3% in the 1970s to less than 2% today<\/a>.<\/p>\n<p>The continent struggled to establish internationally competitive manufacturing even when the global trading environment was relatively open. Among the\u00a0<a href=\"https:\/\/futures.issafrica.org\/thematic\/07-manufacturing\/\" target=\"_blank\" rel=\"noopener\">factors holding it back<\/a>\u00a0were:<\/p>\n<ul>\n<li>unreliable electricity<\/li>\n<li>high transport and logistics costs<\/li>\n<li>small and fragmented domestic markets<\/li>\n<li>weak industrial capabilities<\/li>\n<li>limited access to finance<\/li>\n<li>unpredictable policy.<\/li>\n<\/ul>\n<p>As a result, many economies remained dependent on commodity exports while importing most manufactured goods.<\/p>\n<p>These longstanding constraints have not disappeared. Instead, Africa now faces a double challenge. It must overcome the structural barriers that prevented the traditional manufacturing-led development model from taking off in the past, and also adapt to a global economy that\u2019s changed dramatically. This challenge does not make structural transformation impossible. It simply means the old way of doing it won\u2019t work.<\/p>\n<h2>Four changes have rewritten the rules<\/h2>\n<p>The first change is that\u00a0<a href=\"https:\/\/www.imf.org\/-\/media\/files\/publications\/fandd\/article\/2026\/06\/fd-june26-geoeconomics.pdf\" target=\"_blank\" rel=\"noopener\">trade itself has become a geopolitical tool<\/a>. Countries use export controls, financial sanctions and control over strategic technologies to pursue national security goals. The disruption in the Strait of Hormuz illustrates this.<\/p>\n<p>The second is that manufacturing can\u2019t create jobs on the scale it once did. Automation has reduced demand for the low-skill factory jobs that once absorbed millions of workers.<\/p>\n<p>This matters because by 2030 sub-Saharan Africa is expected to account for\u00a0<a href=\"https:\/\/www.imf.org\/-\/media\/files\/publications\/dp\/2026\/english\/upaiea.pdf\" target=\"_blank\" rel=\"noopener\">roughly half of all new entrants to the global labour force<\/a>. That\u2019s around 15 million young people each year. Creating productive employment will require growth across manufacturing, modern services and higher-value agriculture rather than relying on factories alone.<\/p>\n<p>Third, China has remained competitive in labour-intensive manufacturing. Rising wages led many economists to expect production of clothing, textiles and footwear to relocate to lower-income countries. Instead, China\u00a0<a href=\"https:\/\/www.foreignaffairs.com\/china\/china-pulling-ladder-behind-it\" target=\"_blank\" rel=\"noopener\">still dominates<\/a>. This makes it much harder for African producers to enter sectors that earlier industrialisers used as entry points.<\/p>\n<p>The fourth change is artificial intelligence.\u00a0<a href=\"https:\/\/www.imf.org\/en\/news\/articles\/2026\/07\/21\/cf-africa-can-grow-faster-with-ai-if-it-moves-now\" target=\"_blank\" rel=\"noopener\">AI is becoming a general-purpose technology<\/a>\u00a0that can help economies move labour and capital into more productive activities. For example:<\/p>\n<ul>\n<li>AI-powered tools can help farmers make better decisions about weather, pests, input use and market prices<\/li>\n<li>businesses can use AI to reduce costs, improve quality and participate in regional and global value chains.<\/li>\n<\/ul>\n<h2>How governments should respond<\/h2>\n<p>The African continent still needs millions of better-paying jobs and much higher productivity to reduce poverty and raise living standards. What has changed is the route to achieving those goals.<\/p>\n<p>First, pursue economic security collectively rather than nationally. Structural transformation requires firms to invest in new industries. But they are less likely to do so if export markets are uncertain or supply chains are easily disrupted. A larger integrated market can reduce those risks.<\/p>\n<p>Acting together also gives African countries greater bargaining power as the US, China and Gulf states compete to invest in the continent\u2019s digital and physical infrastructure.\u00a0<a href=\"https:\/\/www.tralac.org\/resources\/our-resources\/6730-continental-free-trade-area-cfta.html\" target=\"_blank\" rel=\"noopener\">Full implementation<\/a>\u00a0of the African Continental Free Trade Area is more urgent than ever.<\/p>\n<p>Second, invest in electricity. It is the foundation of both industrialisation and the digital economy. Manufacturing, digital services and AI-enabled industries cannot grow without reliable power.\u00a0<a href=\"https:\/\/www.imf.org\/-\/media\/files\/publications\/dp\/2026\/english\/upaiea.pdf\" target=\"_blank\" rel=\"noopener\">Yet electricity remains one of the biggest constraints<\/a>. In sub-Saharan Africa 78% of businesses experience routine power outages. As a result they lose\u00a0<a href=\"https:\/\/www.imf.org\/-\/media\/files\/publications\/dp\/2026\/english\/upaiea.pdf\" target=\"_blank\" rel=\"noopener\">an average 8.4% of annual sales<\/a>, compared with a global average of 5.2%. In Nigeria\u00a0<a href=\"https:\/\/www.imf.org\/-\/media\/files\/publications\/dp\/2026\/english\/upaiea.pdf\" target=\"_blank\" rel=\"noopener\">86% of businesses own or share a generator<\/a>. In Kenya it is 65%; in South Africa 63%.<\/p>\n<p>This dependence on diesel generators increases reliance on imported fuel: a vulnerable spot.<\/p>\n<p>Third, compete where Africa has genuine comparative advantages: industries linked to natural resources and growing domestic markets. Examples include:<\/p>\n<ul>\n<li><a href=\"https:\/\/unctad.org\/publication\/critical-minerals-critical-decisions-industrial-policy-energy-transition\" target=\"_blank\" rel=\"noopener\">processing critical minerals<\/a><\/li>\n<li>agro-processing<\/li>\n<li>construction materials<\/li>\n<li>pharmaceutical manufacturing.<\/li>\n<\/ul>\n<p>Finally, recognise that agriculture is central to structural transformation, not separate from it.\u00a0<a href=\"https:\/\/data.worldbank.org\/indicator\/SL.AGR.EMPL.ZS?locations=ZG\" target=\"_blank\" rel=\"noopener\">Around half of sub-Saharan Africa\u2019s workforce<\/a>\u00a0is employed in farming. Higher farm productivity raises rural incomes, releases labour for productive activities and creates demand for manufacturing and services.<\/p>\n<p>AI can accelerate this process by helping farmers.<\/p>\n<p>Countries that successfully connect these new realities to the long-standing goal of shifting workers and resources into higher-productivity activities will be best positioned to achieve sustained and inclusive growth.<\/p>\n<p>\u0640\u0640\u0640\u0640\u0640\u0640\u0640\u0640\u0640\u0640\u0640\u0640\u0640\u0640\u0640\u0640\u0640\u0640\u0640<\/p>\n<p><em>* Professor of Economics, Salisbury University<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The prolonged disruption of shipping\u00a0through the Strait of Hormuz\u00a0has exposed how vulnerable Africa\u2019s economies are to geopolitical shocks. Fuel prices have remained elevated, squeezing economies that\u00a0depend heavily on petroleum imports from the Middle East. These include Ethiopia, Kenya, Mozambique, South Africa, Tanzania and Uganda.<\/p>\n","protected":false},"author":1,"featured_media":9032,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":6,"jnews-multi-image_gallery":[],"jnews_single_post":{"format":"standard","override":[{"template":"1","parallax":"1","fullscreen":"1","layout":"right-sidebar","sidebar":"default-sidebar","second_sidebar":"default-sidebar","sticky_sidebar":"1","share_position":"top","share_float_style":"share-monocrhome","show_featured":"1","show_post_meta":"1","show_post_author_image":"1","show_post_date":"1","post_date_format":"default","post_date_format_custom":"Y\/m\/d","show_post_reading_time":"0","post_reading_time_wpm":"300","post_calculate_word_method":"str_word_count","show_zoom_button":"0","zoom_button_out_step":"2","zoom_button_in_step":"3","show_post_tag":"1","show_comment_section":"1","number_popup_post":"1","show_post_related":"1","show_inline_post_related":"1"}],"image_override":[{"single_post_thumbnail_size":"crop-500","single_post_gallery_size":"crop-500"}],"trending_post_position":"meta","trending_post_label":"Trending","sponsored_post_label":"Sponsored by","disable_ad":"0","source_name":"The Conversation","subtitle":""},"jnews_primary_category":[],"jnews_social_meta":[],"jnews_override_counter":{"view_counter_number":"0","share_counter_number":"0","like_counter_number":"0","dislike_counter_number":"0"},"footnotes":""},"categories":[28,29,36,2362,31,30,27],"tags":[114,111,71,122,5385,131,132],"class_list":["post-21713","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-central-africa","category-east-africa","category-ana-economy","category-featured","category-north-africa","category-southern-africa","category-west-africa","tag-ethiopia","tag-kenya","tag-mozambique","tag-south-africa","tag-strait-of-hormuz","tag-tanzania","tag-uganda"],"_links":{"self":[{"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/posts\/21713","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/comments?post=21713"}],"version-history":[{"count":1,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/posts\/21713\/revisions"}],"predecessor-version":[{"id":21714,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/posts\/21713\/revisions\/21714"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/media\/9032"}],"wp:attachment":[{"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/media?parent=21713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/categories?post=21713"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/tags?post=21713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}