Services, not manufacturing, will be the growth sector for Africa, says Stiglitz
Who Said What is a new interactive tool designed by ACET to generate discussion on major economic transformation topics and statements of our times.
In the first Who Said What statement posted here, renowned economist and Nobel laureate, Professor Joseph E. Stiglitz, challenges the notion that Africa’s development can follow Asia’s growth model of manufacturing export-led growth.
Instead, Stiglitz says, “services will be the growth sector in the future”. Stiglitz, a professor at Colombia University and World Bank chief economist from 1997 to 2000, made these remarks during a presentation in Cape Town, South Africa, on 15 November. The event was organized jointly by three research institutions, the Bureau for Economic Research, Economic Research Southern Africa and REDI 3×3.
So what about agriculture?
Whether agriculture can play a major role in transformation is controversial, Stiglitz said in his presentation. Nevertheless, he quoted favourably ACET’s African Transformation Report, Agriculture Powering Africa’s Economic Transformation, as saying that agriculture presents the easiest path to industrialization and economic transformation for African countries. Stiglitz quoted the report thus:
For many African countries: “agriculture presents the easiest path to industrialization and economic transformation. Increasing productivity and output in a modern agricultural sector would, beyond improving food security and the balance of payments (through reduced food imports and increased exports) Sustain agro-processing, the manufacturing of agricultural inputs, and a host of services upstream and downstream from farms, creating employment and boosting incomes across the economy.”
By improving all the upstream and downstream linkages, agriculture can be a particularly successful part of the strategy for Africa, Stiglitz, in a video recording of his Cape Town presentation, quoted the African Transformation Report as saying.
In the light of Stiglitz’s comments:
Can Africa move from agriculture to services without pursuing a manufacturing export-led growth model?
Can African agriculture create a path to industrialization?
What do you think?
Watch an extract from the Stiglitz Cape Town presentation here:
Have your say in the comments box below.