Chapter 6: Structural transformation, agriculture and Africa’s development

Key messages

  • The African pattern of structural change is very different from the classical pattern that produced high growth in Asia, and, before that, for the European industrialisers. Labour is moving out of agriculture and rural areas, but formal manufacturing industries are not the main beneficiary. Urban migrants are being absorbed largely into services, that are not particularly productive, and into informal activities.
  • Africa has huge potential not only to attain food security but also to generate surpluses that can be traded in international markets. Africa has most of the resources necessary to scale-up agricultural production and productivity. Land and human capital inputs are not scarce in the con-tinent. Physical capital and the good policies necessary to complement Africa’s natural and human resources could be augmented for improved agricultural development.
  • African countries will need to develop an array of high productivity sectors to complement traditional agriculture. The policy agenda should focus on agriculture as a source of growth, through agro-based industrialisation, rather than justifying investment in the sector as a means to address poverty and food security. Adding value to many of Africa’s primary exports may earn the continent a competitive margin in international markets. In addition, the volume of Africa’s food imports are indicative goods.