Africa’s economic performance is reflecting the perils of the global economy. The region’s real GDP growth slowed down to 2.2% in 2016, mainly due to the continued fall in commodity prices and weak global economic growth. Nevertheless, Africa has the potential to grow faster than other continents due to its dynamic private sectors, its entrepreneurial spirit and its vast resources.
Economic transformation is not possible without industrialisation. Industrialisation is necessary for Africa to transform its economies by reallocating resources from low-productivity sectors to higher ones. Only industrialisation can bring about unconditional convergence with the more advanced economies.
That is the reason why many African governments are embracing industrialisation, which calls for new economic strategies. While past efforts to industrialise Africa were often unsuccessful, the current industrial revolution and today’s global environment offer new opportunities, along with challenges. Three strategies are essential for the continent to industrialise: promote a competitive private sector, target economic sectors with high-growth potential including non-manufacturing and better harness the potential of entrepreneurs.
Entrepreneurs are key players for the industrialization process. Africa has a very good entrepreneurial culture: about 80% of Africans consider entrepreneurship as a good career opportunity. The continent has the highest share in the world of adults starting or running new businesses (22%), compared to the Latin American Countries (18%) or Asia (13%).
If we look at the entrepreneurial profile in Africa, we will see that the median age is 31, much younger than in other developing regions, e.g. East Asia, with a median age of 36, or Latin America, with 35. This entrepreneurial profile can be found mainly in the services sector (trade, hotels and restaurants; agriculture, forestry and fishing; manufacturing). Regarding gender, African women are twice as likely to start a business than women elsewhere. In Nigeria and Zambia, 40% of women start businesses, compared with 10% or less in industrial countries. Starting businesses allows women to engage in income generating activities and diversify their households’ sources of income. It also allows for the flexibility in working hours that they need to assume other responsibilities.
If you want to know more, you can read the full report at: http://fashionomicsafrica.org/research/53/