Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
Tokyo International Conference on African Development (TICAD) 7August 29th, 2019Yokohama, Japan
Haroon BhoratSchool of EconomicsUniversity of Cape TownSouth Africa
Quality Growth in Africa:Towards Sustainable, Inclusive
and Resilient Development
Outline
2
▪ Economic Transformation in Africa: An Assessmento Premature DeIndustrialisation in Africa?o Resource Dependence as a Growth Challenge o Economic Transformation and Jobs: What the Future
Holds for Africa
▪ Economic Complexity as an Instrument for Policyo From Product Space Analytics to Frontier Productso Capabilities, Complexity and Industrial Policy Solutions
▪ Conclusion
AGR
MIN
MAN
UTI
CONT
WRT
TRS
BUS
GOS
PES
=15.91; t-stat=1.34
-10
12
3
Log
of S
ecto
ral P
rodu
ctiv
ity/T
otal
Pro
duct
ivity
-.1 -.05 0 .05Change in Employment Share (%)
*Note: Size of circle represents employment share in 2010
Sectoral Productivity and Employment Changes in Africa1975 - 2010
3
Premature Deindustrialisation:
Source: Own calculations using Groningen Growth and Development Centre 10-sector database (see Timmer et al., 2014).Notes: 1. African countries included: Botswana, Ethiopia, Ghana, Kenya, Malawi, Mauritius, Nigeria, Senegal, South Africa, Tanzania and Zambia. 2. AGR = Agriculture; MIN = Mining; MAN = Manufacturing; UTI = Utilities; CONT = Construction; WRT = Trade Services;TRS = Transport Services; BUS = Business Services; GOS = Government Services; PES = Personal Services.
Sectoral Productivity and Employment Changes in Asia1975 - 2010
4
Source: Own calculations using Groningen Growth and Development Centre 10-sector database (see Timmer et al., 2014).Notes: 1. Asian countries are comprised of East and South Asian countries, including: China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand. 2. AGR = Agriculture; MIN = Mining; MAN = Manufacturing; UTI = Utilities; CONT = Construction; WRT = Trade Services; TRS = Transport Services; BUS = Business Services; GOS = Government Services; PES = Personal Services. 2. The estimated regression line, measuring the relationship between productivity and changes in employment share by sector, is not statistically significant.
Premature Deindustrialisation:
• 14 of these 17 ‘African Lions’ are classified as resource-dependent.
5
Resource Dependence as a Growth Challenge
Ethiopia
Ghana
Rwanda
Sierra LeoneMozambique
NigeriaZambiaUnited Republic of Tanzania
Uganda Central African Republic
Burkina FasoAngolaNiger Dem. Rep. of the Congo
Chad
Congo
Sao Tome and Principe
56
78
9
GD
P G
row
th(0
8-1
2)
0 .2 .4 .6 .8 1Resource Dependence
• In period 2008-2013: 17 African Economies have grown at over 5%.
Source: WDI, 2014, UNCTAD (2014), Own Calculations.
Economic Transformation and Jobs: What the Future Holds for Africa
6
Population Projections, World and Sub-Saharan Africa: 2015 - 2100
Total Population (Billion)
Working Age Population (Billion)
2015 2100%
Change2015 2100
% Change
SSA 1.0 3.9 291.62 0.5 2.5 400.00
World 7.3 11.2 53.42 4.8 6.7 39.58
SSA Proportion (%)
13.7% 34.8% 10.4% 37.3%
Source: WDI, 2014, UNCTAD (2014), Own Calculations.
7
Economic Transformation and Jobs: What the Future Holds for Africa
10 SSA countries will account for nearly 70% of population growth in region:• Nigeria: Increase of 570
million – nearly 20% of all SSA popn. growth.
• DRC: Increase by 311 million -10.5% of SSA growth.
• Tanzania: Six-fold increase in population from 53 to 299 mill.
3.8%
10.5%
4.8%
3.7%
3.4%
6.4%
19.2%
31.4%
8.3%
5.5%3%
Angola
DRC
Ethiopia
Kenya
Mozambique
Niger
Nigeria
Other
Tanzania
Uganda
Zambia
Share of Sub-Saharan African Population Growth by Country, 2015-2100
Economic Complexity (ECI) and the Log of GDP per capita by analytical group, 2013
8
Source: Own calculations using trade data from BACI data (HS 6-digit revision 1992) and GDP per capita data from the World
Development Indicators.
Notes: 1. The sample of countries is reduced to those for which we estimate complexity measures.
Economic Complexity as an Instrument for Policy
Economic Complexity as an Instrument for Policy: Visualising the Product Space
9
Text
ile &
Fab
rics
Gar
men
ts
Food
Pro
cess
ing
Beer
/Spi
rits
& Ci
gs
Prec
ious
Sto
nes
Coal
Oil
Min
ing
Airc
raft
Boile
rs
Ship
s
Met
al P
rodu
cts
Cons
truc
tion
Hom
e &
Offi
ce
Pulp
& P
aper
Chem
s &
Hea
lth
Elec
tron
ics
Mac
hine
ry
Agr
oche
mic
als
Oth
er C
hem
ical
s
Ind.
Sal
ts &
Aci
ds
Petr
oche
ms
Leat
her
Milk
& C
hees
e
Ani
mal
Fib
ers
Mea
t & E
ggs
Fish
& S
eafo
od
Trop
ical
Agr
ic.
Cere
als
& V
eg o
ils
Cotto
n/ric
e/so
y et
c.
Toba
cco
Frui
t
Mis
c. A
gric
ultu
re
Not
cla
ssifi
ed
Cluster Key
Economic Complexity as an Instrument for Policy: Product Space in 4 Africa Economies
10
Product Space for Kenya, 2015 Product Space for Senegal, 2015
Economic Complexity as an Instrument for Policy: Product Space in 4 Africa Economies
11
Product Space for Ghana, 2015 Product Space for South Africa, 2015
Economic Complexity as an Instrument for Policy:
12
• Map Product Space of Country• Map Product Space for Sector or Product Cluster
[e.g. horticulture, fibrous plants, copper, cocoa]• Determine Criteria for Identifying Frontier Products• Generate List of Frontier Products• Examine capability constraints for growth in
frontier products’ output.
Possible Sequencing of Industrial Policy
Criteria for Identifying Frontier Products: An Example
Which products should
Country target for export?
Manufacturing and Agro-processing
Ignore primary product opportunities
Products in growing global markets
Positive growth –1995-2015
Products that will advance the complexity
of the economy
More complex than country’s current mix
Products that are feasible given current productive
knowledge
Closer by in termsof Distance
Products that have potential for further future diversification in order to
sustain the growth processHave a positive
Opportunity Gain value
Generate a List of Frontier Products:Example of Top 20 Products - South Africa
Aldehydes
Rock
wool
Sausages
Vehicle parts
Pig and poultry fats
Lifting Mach.
Traffic signals
Engines parts
Dairy Mach.
Agri. Mach.
Rubber sheetsVinyl chloride polymersNitrile compounds
Other engines
Flat rolled iron
Harvesting
Mach.
Iron radiatorsRefractory cementConstruction vehicles
• Shift to the more complex and connected products in the core of the PS.
• Building on capabilities developed in primary sector activities (e.g. Agri. Machinery)
• Relatedness between frontier products (e.g. pig fat and sausages)
Generate a List of Frontier Products:
Example of Top 20 Products - South Africa
15
ALL Com. Description
Rock Wool STON Slag, rock wool, mineral fibre and similar mineral wools
Vehicle Parts TRAN Part and accessories (e.g. bumpers, safety seat belts, gear boxes, drive-axles, exhaust pipes, radiators, suspension system)
Pig and Poultry Fat VEGP Pig fat (including lard) and poultry fat
Lifting Machinery MACH Lifting, handling, loading or unloading machinery (e.g. lifts, escalators, conveyors, hoists, elevators)
Traffic Signals MACH Signalling, safety or traffic control equipment; for railways, tramways,
roads, inland waterways, parking facilities, port installations, airfields
Aldehydes CHEM Aldehydes, whether or not with other oxygen function; cyclic polymers
of aldehydes; paraformaldehyde
Other Engines MACH Engines and motors (e.g. reaction engines, hydraulic power engines,
pneumatic power engines)
Rubber Sheets PLAS Plates, sheets, strip, rods and profile shapes, of vulcanised rubber other than hard rubber
Engine Parts MACH Parts for engines (spark-ignition reciprocating or rotary internal combustion piston engines, diesel or semi-diesel engines)
Vinyl Chloride
Polymers CHEM
Polymers of vinyl chloride or of other halogenated olefins, in primary
forms
Large Flat-Rolled Iron MET Iron or non-alloy steel; flat-rolled products, width less than 600mm, not
clad, plated or coated
Nitrile Compounds CHEM Nitrile-function compounds
Refractory Cements CHEM Refractory cements, mortars, concretes and similar compositions
Fire Extinguishers
Preparations CHEM
Preparations and charges for fire extinguishers; charged fire-
extinguishing
Other Agricultural Machinery
MACH Agricultural, horticultural, forestry, poultry-keeping, bee-keeping machinery; poultry incubators and brooders
Dairy Machinery MACH Milking machines and dairy machinery
Iron Radiators MET Radiators for central heating, not electrically heated and parts thereof, of iron or steel; air heaters
Harvesting Machinery MACH
Harvesting and threshing machinery, straw and fodder balers, grass or
hay mowers; machines for cleaning, sorting or grading eggs, fruit or other agricultural produce
Large Construction Vehicles
MACH Bulldozers, graders, levellers, scrapers, angledozers, mechanical shovels, excavators, shovel loaders, tamping machines and road rollers, self-
propelled
Prints MISC Engraving, prints and lithographs
Source: Own calculations using data from The Economic Complexity Observatory (Simoes & Hidalgo, 2011).
Notes: Com. Refers to product communities. The shortened words denote: CHEM = Chemicals & Plastics; MACH = Machinery; MET = Metals; STON = Stone & Glass; TRAN = Transport Vehicles; VEGP = Vegetables, Foodstuffs &
Wood; MISC = miscellaneous
Conclusion
16
• Major challenge in SSA: Young and growing labour force, requiring sustainable employment.
- Asia: Expansion in manufacturing a source of growth, employment and economic development.
- SSA: Productive structure disconnected and characterised by products with low levels of economic complexity.
• Evidence of Deindustrialisation in Africa: Can this be altered?- Deindustrialisation given way in Africa to low productivity services
employment.- Can Low-Wage Manufacturing Growth Still Deliver Economic Growth
and Employment?
• SSA: Productive structure disconnected and characterised by products with low levels of economic complexity.
• Productive capabilities in SSA distant from those needed in order to produce increasingly complex manufacture products.
• Using Economic Complexity, Product Space analytics and Capabilities Framework to Build a Deliberate set of policies for economic growth.