ECA Policy Brief - Issue 09

Building upstream linkages in industrial commodities presents a real opportunity for African countries to utilize primary commodity endowments for economic transformation. The impressive growth performance in Africa for over a decade has not translated into economic diversification, commensurate jobs or faster social development, and most economies are still dependent on commodity production and exports, with limited value addition and forward and backward linkages to the rest of the economy. Yet there is immense potential for the continent to both develop manufactured inputs for its primary commodity production and to add value to its natural resources, highlighting the role that resource-based manufacturing can and must play in a realizable industrialization strategy for Africa. Industrialization is vital for sustained growth and poverty reduction; industry – and manufacturing in particular – has traditionally been a source of substantial employment generation in developed and developing countries alike. Furthermore, it is now recognized that market forces alone will neither induce adequate economic diversification nor sustain increases in incomes, so concerted State efforts are needed to spur such value addition and industrialization.