18 Jul 2016
Degol Hailu and Chinpihoi Kipgen
"There is a “Made in Africa” movement in the continent. One example is the recent book with the same title by a prominent political figure in Ethiopia. The movement espouses growth in the manufacturing sector as the major driver of development. How is this movement doing so far?"
We examined fifteen countries that experienced annual real GDP growth rates averaging 7% or higher over the past decade. For sure, the high growth was not limited to natural resource extraction and export. For instance, Burkina Faso, Ethiopia and Rwanda, all without significant natural resource sectors, were among the highest growing economies.
The sectors that experienced the highest growth are wholesale and retail trade; transport and communications; and construction. Each of them grew at an average annual rate of 11% or higher. In 2010, these by and large service-oriented sectors contributed 1.4%, 2.1% and 0.5% to the growth in real GDP, respectively.
The manufacturing sector grew at an average annual rate of 9%, but its importance is not impressive, representing less than 9% of GDP over the past decade. In fact, of the fifteen high growth economies, eight experienced a contraction in their manufacturing sectors. The manufacturing sector contributed about 0.4% to GDP growth …