The World Bank has advised Nigeria and other sub-Sub-Saharan countries to accelerate the adoption of ‘industrialized manufacturing’ to bridge the widening unemployment gap, a development that will boost economic growth rate.
According to the World Bank, in a report titled ‘Industrialization in Sub-Saharan Africa: Seizing Opportunities in Global Value Chains’, Nigeria and other sub-Sub-Saharan countries must put industrialization-driven reforms at the forefront of policy strategies for Sub-Saharan African countries.
“Efforts to create jobs, reduce poverty and drive sustainable growth on a large scale in Sub-Saharan Africa would benefit from an expansion of the manufacturing sector, hence industrialization-driven structural transformation should therefore be at the forefront of policy strategies for Sub-Saharan African countries,” it states.
It further stated that the rapid transformation of manufacturing has been the mainstay of structural transformation and the resulting economic growth and development, as it presents greater opportunities to accumulate capital, exploit economies of scale, acquire new technologies, and more fundamentally foster embodied and disembodied technological change.
“The fragmentation of manufacturing activities across countries has created opportunities to industrialize, which offers a viable path to structural transformation and job creation for African countries,” the World Bank report said
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In Africa, 10 to 12 million youth enter the workforce annually while only 3.1 million jobs are created, leaving vast numbers of youth unemployed, this is worsened by the fact that Africa’s youth population is rapidly growing and expected to double to over 830 million by 2050, according to the African Development Bank (AfDB)
AfDB adds that the manufacturing construction and mining industries are expected to create 14 million jobs across SSA over the next ten years while telecommunications and digital services will create two million jobs over the next five years.
In accordance with AfDB, the World Bank report adds that thriving activities in the manufacturing sector require enabling policies from the public sector directed at boosting productivity growth to enable competitiveness, a development that would also make a significant impact on the economy and bridge the unemployment gap.
“Industrial policies must be designed to address the challenges of industrialization, these policies must be combined with investment in enabling sectors, including digital and physical infrastructure and energy, and investment in industry-specific skills-development programs that incorporate the adoption of emerging technologies,” it states.
Some enabling policies proposed in the report include reforming state-owned enterprises, easing licensing and other requirements for the establishment of new firms, promoting access to finance, and stimulating a competitive environment that facilitates the allocation of resources all of which will enhance market competitiveness for these firms.
Experts in Africa’s manufacturing sector admit that industrialization is a catalyst for economic growth noting that most developed economies use it as a tool to thrive, however, the rate of industrialization in Africa has been slow and unimpressive which has caused it to fall behind in global manufacturing.
Yemi Osinbajo, vice president of Nigeria in his keynote address at a recent high-level roundtable on industrialization in Africa said that fast adoption of industrialization in local manufacturing will have a ripple effect on boosting economic growth
“To unleash our full industrial potential African countries must embark on an audacious agenda preferably driven by private sector-led investments to ensure the economic transformation of the continent specifically through industrialization,” he said.
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