ECA Policy Brief: Aggregate demand and structural transformation in Africa

Economists generally emphasize the need for structural transformation − usually manifested in expansion of manufacturing production and exports and their increased sophistication, as well as in the shifting of labour out of low-productivity sectors into higher productivity and higher value added sectors – to enhance economic growth. However, although Africa is consistently diversifying and transforming, this is happening at a very slow pace, worrying to both analysts and policymakers. Current economic policies have not been effective enough to accelerate industrialization and job creation in sectors generally regarded as high-productivity sectors in Africa.