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2008 AEC -Promoting manufacturing to accelerate economic growth and reduce volatility in Africa


This paper investigates the role of structural dynamics and transformation, especially in the form of increased manufacturing share in aggregate output, in accelerating growth and reducing growth volatility in Africa. Using data from 36 African countries, the paper examines the key determinants of manufacturing share in aggregate output and its relationship with real GDP growth and growth volatility. The analysis indicates that an increased share of manufacturing in total output has the potential to raise GDP growth and reduce growth volatility. It is therefore argued that African countries should design and implement effective industrial policies to promote manufacturing and other innovative activities as a means to boost economic transformation and achieve economic and social development goals, including employment creation and poverty reduction.

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