Structural Transformation in Africa: A Historical View

Abstract

This paper presents evidence suggesting that the relationship between income and economic structure is shifting over time, with countries across the income distribution uniformly increasing the share of labor in service sectors and an increasingly less stark relationship between manufacturing intensity and gross value added per capita. The paper then assesses historical patterns of productivity convergence at a more detailed sector disaggregation than has been previously available. The analysis finds suggestive evidence that, at least in recent decades, convergent pressures in services industries are stronger than in manufacturing. Focusing on African economies, the paper presents a country-by-country historical analysis of structural change over the past four decades. Given the varied patterns and trends in structural change across African countries, it is difficult to characterize structural change from a single, continent-wide perspective. Some countries saw an early transition of labor out of agriculture, with manufacturing absorbing this labor in the decades prior to the 1990s, while another group of countries saw a later transition out of agriculture, where the services sector played a large role in labor reallocations in the 1990s and 2000s. Finally, the paper provides a country-by-country structural transformation scorecard to assess patterns of structural change in jobs and growth.

Keywords: Employment and Shared Growth