Brookings: Experts - John Page

Is Africa Rising or Not? A Discussion of Economic Opportunities and Development Challenges in Africa

Thu, 25 Apr 2013 09:30:00 -0400

Event Information

April 25, 2013
9:30 AM - 10:30 AM EDT

Senate Visitor Center
U.S. Capitol
Washington, DC 20510

On Thursday, April 25, the Africa Growth Initiative at Brookings (AGI) and the Congressional African Staff Association (CASA) hosted a briefing for congressional staffers on whether Africa’s recent growth reflects the economic opportunity that many suggest, or if the region’s inequality and other challenges will stand in the way of the continent’s potential being realized. Panelists included Brookings Senior Fellow John Page and Joseph Kweku Assan, assistant professor of political economy of sustainable development at Brandeis University. Andrew Westbury, associate director of the Africa Growth Initiative, moderated the discussion.

This event is part of the Africa Policy Dialogue on the Hill, a monthly congressional briefing hosted by AGI and CASA on topical issues relevant to Africa’s growth and security.

TRANSCRIPT

MR. WESTBURY: Okay. I guess I will act as -- I’ll do the introductions and also try to moderate the discussion, but I don’t think I’ll have a lot to worry about here with this unruly crowd we have.

So, my name is Andrew Westbury, I think I’ve met all of you before, and I’m the assistant director of the Africa Growth Initiative, and it’s pleasure to welcome you to the April edition of the Africa Policy Dialogue on the Hill.

Some of you are repeat customers and have been to these events before, but on a monthly basis we try to hold a breakfast briefing in collaboration with our colleagues at the Congressional African Staff Association, one of them, Greg Simpkins, who should be joining us shortly, and the goal is to create a forum for informed discussion about African economic issues for the United States Congress on Capitol Hill.

Read the full transcript »

Event Materials

042513BROOKINGSAGI

Africa's Jobs Gap

John Page — Mon, 04 Mar 2013 00:00:00 -0500

After almost two decades of sustained growth, Africa is attracting increasingly lavish praise from aid agencies, investors, and journalists, alike. But there is a worrying shadow among the bright lights. Africa is not creating enough jobs to absorb the 10 to 12 million young people entering its labour markets each year. Today, according to the African Development Bank, less than one fifth of Africa’s young workers find waged employment.

The challenge may have escaped the attention of the cheerleaders because unemployment in Africa seems low. In 2009 it was about six percent. This is not because Africa is doing well at generating wage-paying jobs. Eighty percent of job seekers find themselves in informal employment, self-employment or family labour. These are not good jobs. In 2011, 82 percent of Africa workers were classified by the ILO as working poor.

Africa’s lack of good jobs reflects a feature of the region’s growth often overlooked in accounts of its success: Africa’s economic structure has changed very little. The region’s share of manufacturing in GDP is less than one half of the average for all developing countries, and it is declining. The sources of Africa’s recent growth – improved economic management, strong commodity prices and new discoveries of natural resources – are not job creators.

While manufacturing is most closely associated with employment-intensive growth, there are also ‘industries without smokestacks’ in agriculture and services that can create good jobs. Investors in these industries, however, do not see Africa as an attractive location. Domestic private investment has remained at about 11 percent of GDP since 1990. This is well below the level needed for rapid structural change. Foreign investment is overwhelmingly in oil, gas and minerals. Industry in Africa has declined as a share of both global production and trade since the 1980s.

Three drivers – exports, capabilities and clusters – together determine the global pattern of industrial investment. To boost job growth Africa needs a strategy to master them.

For poor countries the export market is the main source of industrial growth. Africa has had little export success: manufactured exports per person are less than 10 percent of the average for low income countries. Breaking into non-traditional export markets will demand a coordinated set of public investments, policy reforms and institutional innovations more characteristic of Asian than African economies. America and Europe also have an important role to play. Liberalisation and harmonisation of their preference schemes for African exports – the African Growth and Opportunity Act and the Economic Partnership Agreements – are vital to the region’s export success.

‘Firm capabilities’ – the know-how and working practices used in production – largely determine quality and productivity. Globally, firms compete in capabilities. To join the game Africa needs higher capability firms. Value-chain relationships between local firms and foreign investors are a good way to learn global best practice. Thus, policies and institutions for attracting foreign direct investment are a key capability-building tool. While reducing the cost of doing business remains a priority, Africa also needs to develop world class FDI promotion agencies and market-friendly ways to connect domestic and foreign firms.

Manufacturing and service industries cluster together. Because such clusters generate productivity gains, attracting new industry into a sparse industrial landscape, such as Africa, confronts a collective action problem. No single firm has the incentive to locate in a new area in the absence of others. Governments can foster industrial clusters by concentrating high quality institutions, social services, and infrastructure in special economic zones. Unfortunately, Africa’s SEZs fail to reach the critical levels of physical, institutional and human capital needed to attract global investors. Strengthening their performance is essential.

Africa is growing, but a rapidly growing labour force and little job creation mean that for the vast majority of young Africans finding a good job is a distant dream. The frustrated young are an indelible image of the Arab Spring. To avoid an “African Spring” a strategy for industrial development is urgently needed.

Authors

John Page

Publication: This is Africa

Image Source: © Joseph Okanga / Reuters

Youth, Jobs, and Structural Change: Confronting Africa’s “Employment Problem”

John Page — Wed, 16 Jan 2013 12:03:00 -0500

INTRODUCTION

Africa has enjoyed fifteen years of sustained economic growth. Per capita income for the region as a whole is rising steadily, and regional growth has exceeded the global average. During the last decade six of the world’s ten fastest-growing economies were in Sub-Saharan Africa. Yet, there are worrying signs that this growth turnaround has not resulted in robust growth of “good” jobs – those offering higher wages and better working conditions – especially for the young.

Driven by a delayed demographic transition, the share of youth (aged 15-24) in Africa – both north and south of the Sahara - has been rising over time and is now higher than in any other part of the world. This demographic bulge offers the possibility of a growth dividend, if – as in the case of East Asia – a rapidly growing work force can be combined with capital and technology. But it can also represent a major threat. Africa is not creating the number of jobs needed to absorb the 10-12 million young people entering its labor markets each year, and as recent events in North Africa have shown, lack of employment opportunities in the face of a rapidly growing, young labor force can undermine social cohesion and political stability.

This paper argues that Africa’s “employment problem” is in fact a symptom of its lack of structural change – the shift in resources from lower to higher productivity uses. Despite rapid growth, Africa has had very little structural change (Arbacha and Page, 2009). While many African economies have relatively low unemployment rates, including for the young, they also have large informal sectors, condemning many of their workers to vulnerable employment and working poverty. Indeed, there is some evidence that since 1990 structural change has moved in the wrong direction in Africa: labor has moved from higher to lower productivity employment (McMillan and Rodrik, 2011).

Seen from this perspective, employment policies cannot focus only on the supply side of the labor market. Indeed, while labor market reforms and active labor market policies can make a contribution to solving the employment problem, the greatest traction is likely to come from policies and public actions designed to accelerate the growth of sectors with high value added per worker: in short from a strategy for structural change.

The paper is organized in the following way. The next section summarizes recent evidence on employment in Africa. It argues that the youth employment problem is a subset of a larger employment problem arising from growing informalization of work and limited growth of good jobs. Section 3 sets out the nature of Africa’s “structural deficit”. It makes the case that the typical low income economy in Africa needs to accelerate the growth of agro-industry, manufacturing and tradable services to create higher productivity jobs.
Sections 4 and 5 turn to public policy. Because of the diversity of Africa’s economies and labor markets, public actions need to be tailored to individual country circumstances. Section 4 begins the discussion by examining potential labor market interventions. Section 5 then turns to policies to accelerate structural change and employment creation. Section 6 concludes.

Read the full paper at afdb.org » (PDF)

Authors

John Page

Publication: Africa Development Bank Group

Image Source: © Noor Khamis / Reuters

Foresight Africa: Top Priorities for the Continent in 2013

Tue, 18 Dec 2012 12:14:00 -0500

Africa starts 2013 with hope and optimism. Africa has dropped its mantle as a “doomed continent” and has weathered several global economic crises fairly well. Today, the continent is a land of opportunity both for Africans and international investors. Many now see the region as “emerging Africa” because of the positive changes that have taken place and continue to take place across the continent.

Africa has changed, moving from economic stagnation to above 5 percent GDP growth on average. The continent is now home to some of the fastest growing economies in the world: Ethiopia, Ghana, Mozambique and Tanzania. This growth has helped build a burgeoning middle class, which has created new markets for goods and services. Investors focused on tapping into these new markets in Africa are likely to find it easier to do business there than ever before as African governments are working to reduce transaction costs. In addition to growing consumer markets, African countries have discovered additional natural resources. If managed properly, these resources could help spur further economic growth and development for the region and improve the lives of millions.

Such an optimistic outlook for the continent means that African and global policymakers must get ahead of the challenges and opportunities for an important year of decision-making. Since 2010, the Brookings Africa Growth Initiative (AGI) has asked its scholars to assess the top priorities for Africa in the coming year. This year, AGI experts and colleagues have identified what they consider to be the key issues for 2013 and ways to leverage opportunities so that Africa can continue its “emerging” momentum. The following briefs in the Foresight Africa collection are meant to create a dialogue on what matters in Africa for 2013, and it is our hope that this dialogue will continue through the year.

Download the full 2013 Foresight Africa report »

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Image Source: © Joe Penney / Reuters

For Africa's Youth, Jobs are Job One

John Page — Tue, 18 Dec 2012 12:05:00 -0500

Editor's Note: This chapter is part of the 2013 Foresight Africa full report, which details the top priorities for Africa in the coming year. Read the full report here.

On the surface, labor market statistics in Africa show that overall unemployment levels for the region are hovering just above the global average while Africa’s youth unemployment levels look better than the rest of the world. However, these numbers don’t reflect the fact that young Africans are more likely to work in the informal sector and not in places that pay good wages, develop skills or provide a measure of job security. Thus, Africa’s youth unemployment challenges encompass more than just a lack of jobs for African youth, but also a shortage of good quality jobs.

As the midpoint of the African Union’s “Youth Decade Plan of Action” approaches, John Page examines some the key labor market challenges for the region and argues that a new Action Plan—one that combines efforts to improve the employment prospects for young people with a strategy for job creation—is needed. Page calls for reforms in both short- and medium-term employment policies, growth in agriculture and other industries, as well as increased technical and vocational training in order to address Africa’s increasing youth unemployment in 2013.

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Authors

John Page

Image Source: © James Akena / Reuters

Learning to Compete: Is Small Beautiful? Small Enterprise, Aid and Employment in Africa

John Page and Måns Söderbom — Thu, 06 Dec 2012 13:20:00 -0500

INTRODUCTION

Small firms are big business in the aid industry. Why? In a word, jobs. Globally, small and medium firms—those with less than 250 workers—account for nearly 80 percent of employment in the formal sector in low-income countries (Ayyagari et al. 2011). When micro and informal firms are counted—and they are not counted very well—the employment share of micro- small and medium enterprises (MSMEs) in developing countries rises to an estimated 90 percent of all workers. Not surprisingly, in the wake of the Arab Spring supporting micro and small enterprises has increasingly come to be viewed by the donor community as a ‘quick fix’ to boost job creation for the young and growing populations of Africa, the Middle East, and Asia.

At the 2012 spring meetings of the IMF and World Bank, Andrew Mitchell, then the UK Secretary of State for International Development, announced his government’s intention to provide funds for a seven-year program designed to help 250,000 small businesses in Africa and Asia create one million jobs. In launching the initiative Mitchell said, ‘Small and medium enterprises are a vital engine of job creation in developing countries. Yet they face a huge financing gap—especially in Africa, where SMEs need three times more funding than is currently available’.

Mitchell is not alone. The G-20 created the Financial Inclusion Experts Group (FIEG) in September 2009 to focus on promoting public-, private-, and social-sector finance to MSMEs in developing countries (McKinsey 2011). And, the European Union has asserted, ‘For developing countries, the expansion of the private sector, notably MSMEs is a powerful engine of economic growth and the main source of job creation (emphasis in original)’ (EU 2012).

Donor enthusiasm for small enterprises arises from a happy coincidence of objectives and instruments. Job creation is the objective, and money—in the form of development finance or funding for technical assistance—is the instrument. There are an estimated 365-445 million, formal and informal, MSMEs in the developing world. Of these approximately 70 percent report that they do not use any external financing, although they would do so if financing were available. Another 15 percent are underfinanced. The financing gap is estimated at US $2.1 trillion to US $2.5 trillion (McKinsey 2010, 2011). Filling such a large financing gap in the pursuit of jobs is an attractive objective for both public and private development actors.

In this paper we ask whether aid programs targeted to small and medium enterprises (SMEs) in Africa are the best way to create jobs. Following this introduction, Section 2 describes the current state of donor assistance to SMEs. There are more than 300 public and private investment funds for SMEs in low-income countries and almost a quarter of their investments in 2010 went to Africa. Official development assistance to SMEs totalled more than US $1 billion in 2009.

Section 3 surveys the cross-country evidence on SMEs and job creation. The data available indicate that when a cut off of 100 employees is used SMEs employ nearly 60 percent of workers in low-income countries. Firms in the size range 5-19 workers create the greatest share of new jobs in low-income countries, more than 58 percent, although the data available do not tell anything about how long those jobs last. There are also substantial differences in wages and productivity growth between small and large firms. Small firms consistently trail large firms in wages paid, wage growth and productivity growth.

In Africa firms with more than 100 workers employ about 50 percent of the labor force. Medium-scale enterprises (20-99 workers) constitute the second leading employment category with about 27 percent of the labor force, and small firms employ a further 23 percent. However, consistent with the evidence for developing countries in general, small firms in Africa appear to create a disproportionate share of new jobs. In the median African country about 47 percent of new jobs were created in firms with 5-19 workers.

There are, however, several methodological problems that bedevil attempts to draw strong conclusions from the data available about the ability of small firms to create jobs. The most critical of these is the inability to distinguish between gross and net job creation. Small firms indisputably create new jobs, but if small firms also have higher exit rates, ignoring firm exit, will tend to exaggerate their role in employment creation. The cross-country data are also wholly uninformative with respect to wages and wage growth.

Section 4 attempts to deal with productivity and wages by using a more restricted set of data drawn from enterprise surveys of nine African countries. There is a strong positive relationship between productivity and firm size. The average worker in a 160-worker firm produces as much value-added in 15 minutes as the average worker in a 5-worker enterprise does in an hour. Not surprisingly, workers in small African firms are paid far less than employees in larger firms. The earnings of the average worker in a 100-worker firm are about 80 per cent higher than the earnings of someone working in a 5-worker enterprise. This evidence is consistent with other studies using labor market data that find that the quality of jobs in small firms in Africa is lower than those in large firms.

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Authors

John Page
Måns Söderbom

Image Source: © SIPHIWE SIBEKO / Reuters

Harnessing Technology and Innovation in the Fight Against Global Poverty

Wed, 10 Oct 2012 15:56:00 -0400

This collection of policy briefs was commissioned for the ninth annual Brookings Blum Roundtable on Global Poverty, held in Aspen, Colorado on August 1–3, 2012.

There is growing excitement among governments, international organizations, the private sector, philanthropic organizations and civil society about the potential of technology and innovation to dramatically improve the lives of poor people around the world.

Mobile technology is giving poor people the capacity to transact, borrow and save through their cell phones. Connection technologies such as open source software are allowing people in Haiti and Pakistan to collect and analyze information about, and then respond to, violence, corruption and natural disasters. Myriad ‘green growth’ technological innovations across the globe are expanding access to electricity, increasing agricultural yields while also reducing harmful emissions.

But innovation in the service of development goals is not just about achieving technological breakthroughs. Recent research shows that new business models often matter far more than the technology of a given product when serving poor communities. Moreover, promising technologies do not bring about improvements in the lives of the world’s poorest people unless they are adequately invested in, rigorously evaluated, and then brought to scale, which typically requires the collaboration of many actors, including the private and philanthropic sectors and government.

The following policy briefs explore these issues in detail, lay out the challenges, and offer a range of specific recommendations on what needs to happen and why.

Image Source: © Suhaib Salem / Reuters

It’s What You Make, Not How You Make It—Why Africa Needs a Strategy for Structural Change

Wed, 10 Oct 2012 15:56:00 -0400

John Page asserts that structural change—the shift of resources in a country from low to high productivity sectors—is more important than technology in addressing the current jobs crisis in Africa and recommends specific steps to kick-start transformation and create globally competitive industries on the continent.

Publication: Harnessing Technology and Innovation in the Fight Against Global Poverty

Can Africa Industrialize?

John Page — Thu, 16 Aug 2012 16:26:00 -0400

INTRODUCTION

In poor countries structural change—the shift of resources from low productivity to high productivity uses—is a key driver of economic growth. In both theory and history industry has been the sector that leads the process of structural change. The East Asian success story is a manufacturing success story. Chile and India have achieved sustained growth through the rapid expansion of agro-industry and services exports, respectively. These are also ‘industrial’ processes; the organization of production and the Capabilities required of the firm have more in common with manufacturing than with traditional agriculture and services.

Africa has failed to industrialize. After a brief period of industrial growth following independence—largely driven by state investment and import substitution—Africa’s industrial sector entered a quarter century of decline. Today on average manufacturing in Africa’s low-income countries is smaller as a percentage of GDP than it was in 1985, and unlike Chile or India, agro-industry and tradable services have not taken up the space created. As a result, Africa has experienced very little growth enhancing structural change. Indeed, there is some evidence that since 1990 labor in Africa has moved from higher to lower productivity employment (McMillan and Rodrik, 2011).

This paper asks a straightforward but difficult question: can Africa industrialize? Put differently, what will it take for the typical low-income economy in Africa to accelerate the shift of labor from low productivity jobs in agriculture and the informal sector to higher productivity jobs in agro-industry, manufacturing or tradable services? Implicit in such questions is the proposition that structural change is needed.

Section 2 argues the case for structural change. Most African countries have developed national visions that call for achieving a middle-income status by about 2025. To realize this vision, Africa’s economies will need profound changes in their economic structures, but there is little evidence that significant structural change has underpinned Africa’s recent growth (Go and Page, 2008). The region’s 1995–2005 growth turnaround—and its recovery from the 2008–2009 global crisis—was driven primarily by new mineral discoveries, rising commodity prices and the recovery of domestic demand (Arbache et al., 2008; Arbache and Page, 2009). It is doubtful whether in the absence of structural change sufficient growth can be sustained for Africa to reach middle-income levels by 2025.

Section 3 sets out the dimensions of Africa’s industrialization challenge. Africa has ‘deindustrialised’ in three important respects: size, diversity and sophistication. While industry—and manufacturing in particular—has declined in Africa over the past quarter of a century the global industrial economy has undergone major changes. Developing countries—especially ‘factory Asia’—have become major players in global manufacturing and services trade. This means that Africa today faces a very different industrialization challenge from that faced by earlier developing country entrants into manufacturing. Section 4 explores the nature of the challenges faced by Africa in breaking into the global industrial economy.

Sections 5 and 6 turn to policy. Section 5 asks what policies are appropriate for Africa’s late industrializes. It reviews the conventional wisdom that Africa’s failure to industrialize is primarily due to its poor investment climate and puts forward some unconventional wisdom. It recommends three interrelated strategic initiatives—tilting towards exports, encouraging agglomerations and building capabilities—as essential complements to investment climate reforms. Section 6 briefly takes up the practice of industrial policy and Section 7 concludes.

Read the full piece in the Journal of African Economies (subscription required) »

Authors

John Page

Publication: Journal of African Economies

Image Source: © Mohamed Nureldin Abdallah / Reuters

Jobs, Justice and the Arab Spring: Inclusive Growth in North Africa

John Page — Sun, 01 Jul 2012 00:00:00 -0400

2012

ABOUT THE AUTHOR

John Page

Managing a Modest Boom: Oil Revenues in Uganda

Mark Henstridge and John Page — Fri, 01 Jun 2012 00:00:00 -0400

INTRODUCTION

Uganda has oil. But oil under the ground is not worth much unless it can be extracted and converted into something more useful. While producing oil for sale entails overcoming geological, engineering, and logistical challenges, this paper focuses on the more important challenge, which is economic. The economic challenge is what to do with the money that will flow to the government from successful production of oil and how to make the most of the opportunity it offers.

To address that challenge in Uganda, we first need to have a clearer idea of how much money we are talking about. That in turn, will hinge on three closely linked decisions: the scale and timing of investment in production, the scale and timing of investment in refining capacity, and the scale and timing of investment in any export infrastructure. Each of those decisions has an impact on the timing and scale of revenue flows and of new or contingent liabilities on the public finances. It also depends on the price of oil, which is notoriously difficult to forecast.

Even if we have a sense of how much oil money will accrue to the government, and when it might arrive, the decisions over what to do with it will need to be taken in the context of the broader challenges of public finance in a developing country. This paper sets out some policy options for the use of oil money in Uganda. The aim of the paper is to de-mystify the opportunities and challenges of oil.

We start by setting out how much oil revenue we are talking about, and by considering what it takes to generate such revenue. We then estimate when we might expect any serious amounts of revenue to be received. We believe the opportunities offered by oil are reasonably good—there is likely to be a substantial increment to public revenue—but that oil is not going to transform Uganda into a petro-state.

We frame decisions on the allocation of oil revenues within a broader fiscal context, considering the ways to think about increments to public investment, the domestic and foreign debt strategy, questions of tax cuts and cash transfers, together with some of the broader issues of intergenerational equity. We also consider the appropriate strategies for using oil revenues to transform the domestic economy. We conclude that the opportunities oil offers will only be realised and the risks avoided if public policy does what it should be doing anyway, but better.

Read the full paper at OxCarre » (PDF)

Authors

Mark Henstridge
John Page

Publication: Oxford Centre for the Analysis of Resource Rich Economies (OxCarre), University of Oxford

Image Source: Reuters

Aid, Structural Change and the Private Sector in Africa

John Page — Wed, 01 Feb 2012 00:00:00 -0500

INTRODUCTION

One of the foundations of development economics is the stylized fact that developing economies are characterized by large differences in output per worker across sectors. For such economies structural change––the shift of resources from low productivity to high productivity uses––is the key potential driver of economic growth (Lewis 1954; Kuznets 1955). Virtually all of the developing economies that have transformed themselves from low- to middle- and upper-income status have undergone profound changes in their economic structures (Chenery 1986).

Structural change matters crucially for Africa. There is little evidence that significant structural changes underpinned more rapid growth between 1995 and 2008 (Go and Page 2008; Arbache and Page 2009) the region’s recovery from the global economic crisis of 2008-09––like its growth turnaround––was driven primarily by commodity prices and the recovery of domestic demand. Africa has failed to break into new global markets. Private investment remains low, and direct foreign investment is largely concentrated in mining and minerals. Africa needs more high value-added activities ranging from agro-processing to manufacturing to tradable services to create good jobs and sustain growth. The private sector must be the central actor in that structural transformation.

This paper argues that official development assistance (foreign aid) has partly been responsible for the lack of structural change in Africa. Nowhere in the developing world is foreign aid more important to development policy and development budgets than in Africa. Africa’s development partners have devoted too few resources and too little attention to two critical constraints to structural change, infrastructure and skills, focusing instead on easily understood, but potentially low impact regulatory reforms. Changes to aid programmes, such as the Aid for Trade initiative, and new aid actors, such as China, offer the promise of new investments and policy priorities, but significant changes are still needed. A new strategy––one that catalyses private investment for structural change––must become the centrepiece of aid in Africa.

The next section of the paper presents the results of some recent research into the role of structural change in growth and poverty reduction in Africa. Its most striking finding: faster structural change can boost the region’s chances of meeting the poverty reduction target of the Millennium Development Goals (MDGs). Section 3 documents the limited extent to which structural change has taken place in Africa over the past three decades. It focuses on the manufacturing sector, which for most countries is the driver of industrialization and finds that in contrast to the rest of the developing world Africa has deindustrialized.

Sections 4 and 5 examine the role of aid. Since the 1990s, donors in Africa have focused on the investment climate. This is a critical area for action, but investment climate reforms have yielded few results. Section 4 describes the past errors and future opportunities for donors in building a better investment climate. Section 5 moves beyond the investment climate and sets out a new strategic agenda for aid and structural change in Africa. It argues that donor support for strategic interventions to push nontraditional exports, support industrial agglomerations, build firm capabilities, and strengthen regional integration will be needed to achieve a meaningful change in Africa’s economic structure. Section 6 concludes that a new aid strategy for Africa–– one that supports structural change––is needed.

Read the full paper at the World Institute for Development Economics Research »

Authors

John Page

Publication: World Institute for Development Economics Research

Image Source: James Akena / Reuters

A New Agenda for Aid to Africa

Thu, 05 Jan 2012 13:48:00 -0500

John Page stresses that 2012 is likely to be a year in which aid to Africa will fall and a new aid agenda will be needed. Page argues that after years of neglect donors need to focus on creating good jobs in Africa by shifting away from low impact regulatory reforms toward addressing the binding constraints to Africa’s competitiveness.

Publication: Foresight Africa: Top Priorities for the Continent in 2012

Learning to Compete

Fri, 27 May 2011 09:00:00 -0400

Event Information

May 27-28, 2011

Safari Park Hotel Conference Center

Nairobi, Kenya

Participants of Learning 2 Compete (L2C), a project of the Africa Growth Initiative in conjunction with the United Nations University World Institute for Development Economics Research (UNU-WIDER), hosted a meeting in Nairobi, Kenya from May 27-28, 2011.

The project—a comparative, country based research program—seeks to answer a seemingly simple but complex question: Why is there so little industry in Africa? Utilizing both qualitative and quantitative research methods, the project enlists research teams from a selection of nine African and two South East Asian nations to produce a cross-nations analysis of the challenges to industrial development in Africa. The country comparisons will consist of research and support from institutions in Ghana, Nigeria, Kenya, Tanzania, Uganda, Senegal, Ethiopia, Rwanda, Mozambique, Cambodia, and Vietnam.

The L2C participants convened to present the data and work compiled thus far. Products from this research are intended to provide practical policy recommendations for the development of industry in Africa, inform the debate in the academic community, and contribute to the data available for further research on the continent.

Structural change matters crucially for Africa. The region’s recent growth has been largely driven by expansion of existing primary commodity exports and a recovery of domestic economic activity, and growth is becoming increasingly fragile (Arbache and Page, 2008, 2009). Africa has failed to break into global industrial markets. Private investment remains low, direct foreign investment is largely concentrated in mining and minerals, and despite some notable successes—cut flowers in East Africa; back office services in West Africa, garments in Madagascar and Lesotho—exports have remained highly concentrated in traditional activities.

Africa’s share of global manufacturing value added (excluding South Africa) fell from 0.4 percent in 1980 to 0.3 percent in 2005, and its share of world manufactured exports went from 0.3 to 0.2 percent. Asia in contrast has had explosive industrial development and sustained growth. Yet, most successful Asian economies began their industrialization processes with initial conditions quite similar to many African countries today, and the recent Asian industrial success stories, such as Vietnam and Cambodia, have many characteristics in common with their contemporary African counterparts (Johnson, Ostry, and Subramanian, 2007). Asia’s economies have learned to compete in global markets while Africa’s largely have not. Learning to compete in a wider range of industrial activities is fundamental to growth, job creation, and poverty reduction in Africa.

The project commenced in 2011 and will run through the year 2013, during which time country teams will produce a series of academic working papers which will eventually contribute to a large-scale publication of accumulated research findings. Products from this research are intended to provide practical policy recommendations for the development of industry in Africa, inform the debate in the academic community, and contribute to the data available for further research on the continent.

Transcript

Event Materials

Expanding Financial Inclusion in Developing Regions: Economic Growth through Innovations in Mobile Technology

Mon, 16 May 2011 13:00:00 -0400

Event Information

May 16, 2011
1:00 PM - 5:30 PM EDT

Falk Auditorium
The Brookings Institution
1775 Massachusetts Ave., NW
Washington, DC

Poor and rural communities in developing countries are often excluded from formal financial services, forced to rely on cash-based economies that offer little security and access to credit. Research shows that expanding financial inclusion can have positive effects on economic growth and poverty alleviation by helping poor people save and build their assets base. With estimates of one billion people around the world who lack a bank account but own a mobile phone, recent innovations in mobile phone technology have the potential to improve financial inclusion in Africa and other developing countries by providing basic financial services at a low cost.

On May 16, the Africa Growth Initiative at Brookings, the Central Bank of Kenya and the Alliance for Financial Inclusion hosted a discussion on how financial inclusion in Africa can be supported by innovations in mobile technology and financial services. Panelists addressed various issues surrounding the development, implementation and expansion of mobile financial services to improve the livelihoods of people in Africa.

After each panel, participants took audience questions.

Transcript

Event Materials

Participants

Panelists

Alfred Hannig

Executive Director
Alliance for Financial Inclusion

Njuguna S. Ndung’u

Governor
Central Bank of Kenya

Maria Otero

Under Secretary of State for Democracy and Global Affairs
United States Department of State

James Bilodeau

Associate Director, Financial Services Head of Emerging Markets Finance
World Economic Forum USA

Michael Joseph

Fellow, World Bank
Former Chief Executive Officer, Safaricom

Perks Ligoya

Governor
Reserve Bank of Malawi

Carlos Lopez-Moctezuma

Mexican Banking and Securities Commission (CNBV)
Co-Chair of the AFI Working Group on Mobile Financial Services

David Porteous

Managing Director
Bankable Frontier

Moderator: Shanta Devarajan

Chief Economist, Africa Division
World Bank

Claire Alexandre

Senior Program Officer
Bill and Melinda Gates Foundation

David Ferrand

Director
Financial Sector Deepening Trust

Priya Jaisinghani

Senior Advisor
USAID

Mark Pickens

Microfinance Specialist
Consultative Group to Assist the Poor (CGAP)

Ian Solomon

U.S. Executive Director to the World Bank

The Africa Growth and Opportunity Act: Opening Doors for U.S.-Africa Economic Relations

Fri, 15 Apr 2011 09:30:00 -0400

Event Information

April 15, 2011
9:30 AM - 12:15 PM EDT

Saul/Zikha Rooms
The Brookings Institution
1775 Massachusetts Ave., NW
Washington, DC

In 2000, President William J. Clinton signed the African Growth and Opportunity Act (AGOA), with the goal of opening trade markets and investment between the United States and Africa. Since its implementation, AGOA has increased investment and trade between the two continents, and led to job creation in Africa. The act has also played a critical role for economic growth in many African countries. However, AGOA’s potential expiration in 2015 has many concerned about the future of trade between the U.S. and Africa if the act is not renewed. In June, Zambia will host the tenth annual AGOA Forum to continue the dialogue between the U.S. and African countries on the effectiveness of AGOA and future opportunities for shared growth and trade.

On April 15, the Africa Growth Initiative at Brookings and the Corporate Council on Africa hosted a discussion of the future of AGOA. Panelists discussed whether AGOA alone is enough to promote U.S.-Africa trade and the critical role that nongovernmental stakeholders play in ensuring its success.

After each panel, the panelists took audience questions.

Participants

Panelists

Stephen Hayes

President, Corporate Council on Africa

Florizelle Liser

Assistant U.S. Trade Representative for Africa, Office of the U.S. Trade Representative

Felix Mutati

Minister of Commerce Trade and Industry, Republic of Zambia

Katrin Kuhlmann

Senior Fellow and Director, TransFarm Africa Policy, Aspen Institute

Witney Schneidman

President, Schneidman & Associates International

Rosa Whitaker

President & CEO, The Whitaker Group

The Role of Civil Society in a New Egypt

Thu, 24 Mar 2011 13:30:00 -0400

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March 24, 2011
1:30 PM - 3:00 PM EDT

Falk Auditorium
The Brookings Institution
1775 Massachusetts Ave., NW
Washington, DC

The recent historic events unfolding in Egypt have brought new life to political discourse in the country. Moving forward, Egypt’s civil society must create an inclusive and coherent dialogue in order to chart a course for the country’s immediate relief needs as well as long-term socio-economic and political development.

On March 24, Global Economy and Development at Brookings, the International Youth Foundation and Nahdet El Mahrousa, an Egyptian youth-led nongovernmental organization, hosted a discussion on the way forward for Egypt and the role of civil society in supporting the country’s development as it enters this critical new phase. Panelists included Hisham Fahmy of the American Chamber of Commerce in Egypt; Awais Sufi of the International Youth Foundation; Jackie Kameel of Nahdet El Mahrousa; Amira Maaty of the National Endowment for Democracy; and Shadi Hamid, director of research of the Brookings Doha Center. Brookings Senior Fellow John Page, a former World Bank chief economist for the Middle East and North Africa, moderated the panel discussion.

Participants

Moderator

Panelists

Jackie Kameel

Managing Director, Nahdet El Mahrousa

Awais Sufi

Vice President, International Youth Foundation

Hisham Fahmy

CEO, American Chamber of Commerce in Egypt

Amira Maaty

Program Officer for Middle East and North Africa, National Endowment for Democracy

Brookings: Experts - John Page

Is Africa Rising or Not? A Discussion of Economic Opportunities and Development Challenges in Africa

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Africa's Jobs Gap

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Youth, Jobs, and Structural Change: Confronting Africa’s “Employment Problem”

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Foresight Africa: Top Priorities for the Continent in 2013

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For Africa's Youth, Jobs are Job One

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Learning to Compete: Is Small Beautiful? Small Enterprise, Aid and Employment in Africa

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Harnessing Technology and Innovation in the Fight Against Global Poverty

It’s What You Make, Not How You Make It—Why Africa Needs a Strategy for Structural Change

Can Africa Industrialize?

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Jobs, Justice and the Arab Spring: Inclusive Growth in North Africa

ABOUT THE AUTHOR

John Page

Managing a Modest Boom: Oil Revenues in Uganda

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Aid, Structural Change and the Private Sector in Africa

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A New Agenda for Aid to Africa

Learning to Compete

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Expanding Financial Inclusion in Developing Regions: Economic Growth through Innovations in Mobile Technology

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Participants

The Africa Growth and Opportunity Act: Opening Doors for U.S.-Africa Economic Relations

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Participants

The Role of Civil Society in a New Egypt

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Audio

Transcript

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Participants