Shifting Gears: Igniting Structural Transformation in Africa

Rarely has a country evolved from a low- to a high-income status without sustained structural transformation from agrarian or resource-based towards an industry- or services-based economy. Yet few African countries have been successful in this transformation. This raises many questions: Within agriculture, services or industry, how does the process of moving into higher quality goods and services happen? Within firms, why are some able to move into export markets and start producing new goods, while others languish? How do economies move up the value chain? What determines a country's ability to create jobs? What is the appropriate role for governments and markets in the growth dynamics? This paper summarises the intellectual progress achieved through several major waves of growth research and highlights the remaining challenges of understanding structural change. It then provides some empirical evidence of the limited structural transformation that has taken place in Africa since independence, and suggests a blueprint to help policymakers in Africa and elsewhere address them.