Management and industrialisation in Africa

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By Daniela Scur and Nicolas Lippolis, University of Oxford


Learn more about this timely topic at the upcoming
17th International Economic Forum on Africa
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Africa-IndustrialisaionThe manufacturing sector has traditionally been seen as an engine for development due to its high propensity for productivity gains. Worryingly, recent evidence suggests that this has not been the case in Africa.1 One important determinant of firm productivity is the quality of management practices, and new data sheds light on the state of management in some African countries.

Management around the world

For over 12 years, the World Management Survey (WMS) has been collecting data on management practices using an interview-based methodology. It defines 18 key management practices and scores them from worst practice (1) to best practice (5). The focus is on such practices as monitoring, target-setting and incentives/people management. Research using this data suggests a strong correlation between management and a series of productivity measures – such as firm size, profitability, sales growth, market value and survival. Experimental evidence further confirms a positive correlation.2 Continue reading

Biases in entrepreneurship and industrial policy in Africa

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By Wim Naudé, Professor in Business and Entrepreneurship in Emerging Markets, Maastricht University, Dean of the Maastricht School of Management, The Netherlands, and Research Fellow at the IZA Institute for Labor Economics, Bonn, Germany


Learn more about this timely topic at the upcoming
17th International Economic Forum on Africa
Register to attend


shutterstock_415121221.jpgAfrica has failed to industrialise. At the same time, millions of young people are seeking jobs. Put one-and-one together and the answer seems to be that if these labour market entrants become entrepreneurs in industry then they can in one stroke create jobs and help Africa industrialise. Yet, optimising the nexus between entrepreneurship and industrialisation requires overcoming some vexing policy biases. These can be categorised as biases of over-estimation and biases of under-estimation.

First, industrialisation’s job-creation potential is often over-estimated. The world is in a Fourth Industrial Revolution (4IR) driven by technologies such as the Internet of Things, automation, additive manufacturing and big data analytics (see Naudé, 2017). These technologies are causing the loss of low-skilled routine jobs, of which Africa has a disproportionate share. It’s estimated that up to 66% of all jobs in developing countries are at risk. Relatively poor African countries such as Ethiopia are at a particular risk of having around 44% of current jobs susceptible to automation. The 4IR is furthermore leading to a ‘re-shoring’ of manufacturing back to advanced economies. This is to the detriment of low-wage labor in African and other developing countries. As Culey (2012) points out: How important is low-cost labor when you don’t actually need labor?
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Electricity for all in Africa: Possible?

By Bakary Traoré, Economist, Sébastien Markley, Statistician, and Ines Zebdi, Research Assistant, OECD Development Centre 1 


Explore the 2017 African Economic Outlook: Entrepreneurship and Industrialisation in Africa for more on this subject


Electricity-in-Africa-shutterstock_563620138For decades, access to electricity has been a serious challenge in Africa. It still is. 600 million Africans are not connected to an electrical network. African businesses cite electricity amongst the two most severe constraints on their operations (Enterprise Surveys, 2016). Twenty-five of the 54 countries in Africa, including Nigeria, South Africa, Ghana and Senegal, deal with frequent power crises characterised by outages, irregular supply and surging electricity costs. These are symptoms of insufficient generation capacity and a lack of infrastructure.

Despite these sobering facts, a number of recent initiatives signal that major improvements may be underway. The impetus to act is driven by the benefits Africa can reap by investing in electrification. Such benefits go far beyond direct job creation in energy infrastructure, as important as that is. Several pieces of evidence (Jimenez [2017], Torero [2014], van de Walle et al. [2013]) suggest that household electrification also increases job opportunities by carving out more time for work and enabling rural micro-entrepreneurship. We see three reasons for hope that Africa is on the path to greater electrification – provided certain conditions are met.

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Strengthening Regional Agricultural Integration in West Africa

By John Staatz, Professor Emeritus, Dept. of Agricultural, Food and Resource Economics, Michigan State University

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Photo credit: Ryan Vroegindewey

Soaring and volatile international food prices since 2007-08 have forced West African governments and their development partners to translate their long-standing rhetoric about support for West African agriculture into concrete programmes. Doing so effectively, however, has proven much more challenging than simply meeting the Comprehensive Africa Agriculture Development Programme (CAADP) goal of increasing the share of national budgets and donor funds dedicated to the agricultural sector. A recently released joint study by the Syngenta Foundation for Sustainable Agriculture (SFSA) and Michigan State University (MSU) draws lessons from such efforts over the past 10 years and suggests ways in which policies and programmes can be more effective in helping West Africa feed its young, burgeoning and increasingly urban population. Research by MSU, SFSA and West African scholars provides a number of crucial policy insights. Continue reading

Infrastructure, jobs, good governance: Bringing Africans’ priorities to the G20 table

By Michael Bratton, University Distinguished Professor of Political Science and African Studies at Michigan State University and senior adviser to Afrobarometer, and E. Gyimah-Boadi, Executive Director of Afrobarometer and the Ghana Center for Democratic Development

 

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Beyond the limelight and the headlines, the recent Group of 20 (G20) summit accomplished an important piece of business by launching the Compact with Africa. The next step is crucial: negotiating the priorities that the compact will address.

One key concept is that the compact is with – rather than for – Africa, implying that it will rely on true partnerships to pursue mutually agreed-upon goals.

With its contribution to a “20 Solutions” document presented to the G20 by a consortium of think tanks, the pan-African research network Afrobarometer is working to ensure that the compact will take into account what ordinary Africans say they want and need.

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Small Business Acts : Catalyseurs de l’entrepreneuriat africain

Par Jean-Michel Sévérino et Jérémy Hajdenberg, co-auteurs d’Entreprenante Afrique 1 


Explorez les Perspectives économiques en Afrique 2017Entrepreneuriat et industrialisation en Afrique pour en savoir plus sur ce sujet.


Catalyseurs-entrepreneuriat-africainL’Afrique n’est pas différente des autres continents : le dynamisme économique africain repose comme ailleurs en très grande partie sur les PME. La nouvelle classe d’entrepreneurs africains ayant émergé depuis dix à vingt ans apporte avec audace et innovation des réponses durables aux besoins d’un continent dont les économies sont encore fragiles.

Parallèlement, la situation démographique de l’Afrique s’annonce comme un défi. 133 millions il y a dix ans, les 15-24 ans sont aujourd’hui 172 millions et seront 246 millions en 2020. Alors que 74 millions d’emplois devront être créés d’ici là afin que le taux de chômage des jeunes évite simplement d’augmenter, 72% des jeunes Africains se disent attirés par l’entrepreneuriat.

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What’s standing in the way of South Africa’s entrepreneurs?

By Talitha Bertelsmann-Scott, Head : Economic Diplomacy Programme, and the entire Economic Diplomacy Programme team, South African Institute of International Affairs (SAIIA)


Explore the 2017 African Economic OutlookEntrepreneurship and Industrialisation in Africa for more on this subject.


Sout-Africa-EntreIndustrialisation is a key driver of sustainable development. It creates jobs, adds value and promotes trade through greater integration into global value chains. At the same time, entrepreneurship and small and medium enterprises (SMEs) are critical to every economy by creating jobs and innovative goods, promoting a competitive environment and economic growth, and facilitating income distribution. The South African government recognises the need for entrepreneurship and SMEs’ engagement with industrialisation efforts to address some of the key socio-economic challenges in the country, particularly poverty, inequality and unemployment. However, South African entrepreneurs 1 still face a number of constraints that hinder greater participation in industrialisation efforts. So, what are the roadblocks standing in the way of entrepreneurs? Continue reading