Free Trade Deal Could Boost African Manufacturing

The future of Africa will depend on its ability to use the industrialization opportunity presented by the AfCFTA.

Posted on 12/8/20
By Kouassi Yeboua and Requier Wait | Via ISS Today
Factory workers producing shirts at Sleek Garment Export, in Accra, Ghana. (Photo © Dominic Chavez/World Bank)
The industrialization has become one of the most talked-about issues among African policymakers. A vibrant manufacturing sector is crucial to transforming economies on the continent, achieving sustained growth, creating more jobs and achieving prosperity for all.

Yet Africa’s experience with industrialization has been disappointing. Trade liberalization and appropriate complementary policies could turn things around. The African Continental Free Trade Area (AfCFTA) presents an opportunity for economic growth and transformation across the continent. To get there though, several major hurdles in implementing the new deal will need to be overcome.

After independence, most African countries tried to industrialize through state-led import substitution policies. These endeavors failed due to poor leadership, a lack of commitment, mismanagement, commodity price busts and an absence of clear industrial development planning.

Research by Bruton shows the extent to which these efforts were implemented on an ad hoc basis, lacking a clear economic rationale. Subsequent structural adjustment programs seem to have further dampened the ideal of industrialization in many African countries. They encouraged states to focus on what they already had an ‘advantage’ in – often commodities.

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