Dirk Willem te Velde (ODI) | Four entry points for UK policy in Africa’s economic trajectory

A worker at a factory run by the United Nations Office for Project Services (UNOPS) in Port au Prince, Haiti. Employing 20 young men from the Cite Soleil area of the city, the factory is producing transitional shelters for thousands of families who were displaced from their homes following the massive earthquake which struck Haiti on 12 January 2010. Six months on, the majority of people are still living in emergency shelters - but it is hoped that projects such as this will enable many more families to be re-housed over the coming months.

Dirk Willem te Velde (Director of SET Programme, Head of IEDG and Principal Research Fellow, ODI) 24 April 2017 (based on a presentation at Chatham House 20 April 2017). This note argues that the UK can offer an appropriate support package using smart aid, targeted development finance, free trade and foreign direct investment (FDI) promotion and temporary (legal) migration policies to help with economic transformation and job creation in Africa.

14 March 2017 | Foreign direct investment and economic transformation in Myanmar: the role of the garment sector


On 14 March, SET hosted a workshop in Yangon to present and discuss the findings of the recent research paper, ‘Foreign direct investment and economic transformation in Myanmar’. Attendees explored questions around the role of the garment sector, including: what role does the garment sector play in promoting exports, employment and the transfer of skills in Myanmar? How does foreign investment contribute to Myanmar’s garment sector? And how can foreign investment, from China and other countries, further contribute to economic transformation in Myanmar?

Phyllis Papadavid (ODI) | How debt sale can aid Ghana’s economic transformation

22571519737_ef32ed1523_b (2)

Phyllis Papadavid (Senior Research Fellow – Team Leader of International Macroeconomics, ODI)  20 April 2017 Ghana’s recent debt sale presents an opportunity The cost of, and access to, finance is important for economic transformation in developing countries’ manufacturing sectors. However, among some firms in sub-Saharan Africa (SSA), the costs for borrowing are significantly higher than for […]

Supporting Economic Transformation: Briefing Papers


Margaret McMillan, John Page, David Booth and Dirk Willem te Velde, March 2017

Launched alongside Supporting Economic Transformation: An Approach Paper, these briefings summarise the central tenets of SET’s approach to the challenge of promoting economic transformation and explore its importance for driving sustainable, inclusive development in the world’s poorest countries.

Foreign Direct Investment and Economic Transformation in Myanmar

Burma 3

Stephen Gelb, Linda Calabrese and Xiaoyang Tang, March 2017

The paper reviews in some detail the foreign (Chinese) presence in four sectors in Myanmar and its impact on economic transformation. Significant positive effects include employment and exports in garments, local enterprise development and downstream user costs in construction (and infrastructure), and exports, technology transfer and product market competition in agriculture and agro-processing and finally makes a number of policy recommendations for UK DFID.

Supporting Economic Transformation: An Approach Paper


Margaret McMillan, John Page, David Booth and Dirk Willem te Velde, March 2017

This approach paper seeks to define economic transformation, offers an approach to measuring progress towards it, and examines case studies from African and Asian economies where transformative policies have been successful to greater and lesser extents. The paper concludes by presenting a multi-disciplinary approach to identifying opportunities, diagnosing constraints and mapping out realistic policy options for countries to use to turn their economic growth into genuine transformation.

Jun Hou (ODI) | The relocation of Chinese manufacturing companies in Africa


Economic transformation often denotes a move away from low-productivity to high-productivity growth. Promoting economic transformation in the aftermath of shocks is one strategy for developing economies to build resilience to further shocks. This is particularly true for resource dependent economies, given that they are more vulnerable to shocks. Many of these countries are still managing the fallout from multiple economic shocks, including the continued effects of the commodity price downturn. Fuel exporters saw GDP growth fall from 5.7% in 2014 to -1.6% in 2016 and these countries now face the risk of external debt distress.

Phyllis Papadavid (ODI) | How the naira can aid Nigeria’s economic transformation

The people in the fishing village of Orimedu (Lagos State) have benefited greatly from Nigeria's Fadama II project. Photo: Arne Hoel / World Bank

Photo ID: Hoel_100915_DSC_4729

Economic transformation often denotes a move away from low-productivity to high-productivity growth. Promoting economic transformation in the aftermath of shocks is one strategy for developing economies to build resilience to further shocks. This is particularly true for resource dependent economies, given that they are more vulnerable to shocks. Many of these countries are still managing the fallout from multiple economic shocks, including the continued effects of the commodity price downturn. Fuel exporters saw GDP growth fall from 5.7% in 2014 to -1.6% in 2016 and these countries now face the risk of external debt distress.

23 February 2017 | The UK’s financial sector and sub-Saharan Africa: partnerships for development


On 23 February, SET, in partnership with the All-Party Parliamentary Group for Trade and Investment, hosted a private roundtable event in the Palace of Westminster, London. The event brought together representatives of developing countries with donors, private investors and representatives of the City of London to identify opportunities for private sector investment in sub-Saharan Africa. Amongst topics of discussion were the practical and financial challenges facing British investors seeking to finance development, including in sectors such as infrastructure, energy and manufacturing, ways to overcome barriers to the achievement of high-quality, sustainable economic transformation, and the growing role of development finance institutions.

Trade in Services and Economic Transformation: A New Development Policy Priority


Edited by Bernard Hoekman and Dirk Willem te Velde, February 2017

Services play a vital role in economic transformation and job creation in poor countries, but the effects are different from those in agriculture or manufacturing. While much of the discussion on economic transformation centres on transforming agriculture and moving into manufacturing, services are an under-explored component of economic transformation strategies.
This set of essays analyses the role of services, and especially trade in services, in economic transformation.

22 March 2017 | Economic transformation: a new approach to inclusive growth


Economic transformation has the potential to reduce poverty and drive sustainable, inclusive growth in developing countries. Yet, efforts to promote transformational policies have not always proven to be successful; many low-income countries that have attempted to transform their economies have experienced low-quality, job-less growth with little in the way of genuine transformation. This ODI panel event sees the launch of SET’s flagship approach paper, and bring together key figures driving forward the transformation agenda to discuss: what is economic transformation, what does it mean for the world’s poorest, and how can it be supported in practice?

Gerrishon K. Ikiara | Kenya’s institutional structure behind industrialisation


Industrialisation of the Kenyan economy has remained an important goal for Kenyan policy-makers since independence and especially since the mid-1970s. This was when the country started facing more socioeconomic challenges, partly associated with a slowdown in the country’s economic performance following the global oil crisis. It has become clear over the years, however, that, for the country’s industrialisation process to experience a truly transformative phase, there is a need for a conducive institutional framework that encompasses the following areas: industrial policy-making; trade facilitation; clustering; investment promotion; building local capability; infrastructure modernisation; a more focused public–private sector dialogue and coordination; and building financing capability.

11 November 2016 | Trade in Services and Economic Transformation Roundtable


In collaboration with DFID, the ODI-SET team organised a Trade in Services Roundtable Event hosted at DFID London on 11 November 2016. The roundtable sought to unpack the key challenges and opportunities for trade in services in developing countries and identify what DFID can do over the next five years to support services. The event report summarises key thematic issues emerging based on roundtable reflections from representatives from ODI, TheCityUK, Commonwealth Secretariat, European University Institute, ILEAP, International Centre for Trade and Sustainable Development, International Growth Centre, International Trade Centre, Sussex University, United Nations Conference on Trade and Development, Centre for Global Development, and World Bank.

27 October 2016 | Effective Implementation and the Role of the Private Sector in Tanzania’s Five Year Development Plan


The SET programme, in collaboration with the Economic and Social Research Foundation (ESRF), organised a private sector consultative workshop on 27 October 2016 in Dar es Salaam. The workshop sought to build consensus around how to approach implementation of the FYDP II and on the core elements that should constitute a strategy and framework to guide the effective implementation of the Plan. In addition, the workshop was designed to develop a shared understanding of the practical roles that different stakeholders – both in the public and private sectors – should play in implementing the FYDP II.

Neil McCulloch | How not to diversify: Nigerian style


‘I am giving preference to those who are “Made in Nigeria,”’ announced the moderator at the Nigerian Economic Summit, which took place from 10 to 12 October in Abuja. His bias, echoing the theme of the summit, perfectly encapsulated Nigeria’s response to its current economic malaise… and the muddled economic thinking that is making it hard for the country to emerge from its current economic crisis. As Africa’s largest economy, and with its largest population, of 170 million people, Nigeria should dominate the continent. But the country has long been one of the world’s prime examples of the resource curse: 60 years after discovering oil Nigeria still relies on it for over 90% of export revenue, and the government depends on it for 62% of its revenues.

David Primack | Services trade data: a fundamental roadblock to negotiations and policy-making to support structural transformation

Truck mechanics at the port in Tema, Ghana, June 16, 2006. (Photo by Jonathan Ernst)

Despite improvements in the collection of services trade data over the past 15 years, in many low-income and least- developed countries (LICs) the macro- and micro- level services data needed for meaningful economic analysis simply do not exist. This acts as a fundamental roadblock to having informed services trade negotiations and to using services trade policy to leverage services for inclusive growth and structural transformation. The relative paucity of services and services trade data has contributed to obscuring the role that services have increasingly been playing, alongside agriculture and manufacturing, in the process of structural transformation.

Trade in Services and Economic Transformation


Neil Balchin, Bernard Hoekman, Hope Martin, Maximiliano Mendez-Parra, Phyllis Papadavid, David Primack and Dirk Willem te Velde, November 2016

While much of the debate on economic transformation centres around transforming agriculture and moving into manufacturing, the potential of services is often left unexplored. A proper understanding of the trade dimension of services lies at the frontier of new analytical work on economic transformation. It is crucially important for policy-makers in low-income countries, many of whom may not regard services, or trade in services, as a prime focus of action on economic transformation. This paper explores how policies both directly and indirectly affecting trade in services can have a major impact in terms of increasing the contribution of services to economic transformation.

Alberto Lemma (ODI) | Structural transformation and climate change in Africa


In a new report published jointly by The New Climate Economy and the ODI’s Supporting Economic Transformation programme, we aim to shed light on a key question that will probably become ever more relevant within the economic policy sphere in Africa: how do economic transformation, climate change and societal change intersect? More importantly, what are the requirements for positive economic transformation in the light of these interactions? In light of these, we have attempted to highlight the fact that economic transformation in Africa can present win-win scenarios that promote both growth and climate change adaptation.

Africa’s New Climate Economy: Economic Transformation and Social and Environmental Change


Milan Brahmbhatt, Russell Bishop, Xiao Zhao, Alberto Lemma, Ilmi Granoff, Nick Godfrey and Dirk Willem te Velde, November 2016

Africa’s “Growth Miracle” in the 21st century has reversed a long standing narrative of pessimism about the region. It has emboldened hope for the future. GDP growth reached around 5% annually from 2001-2014. Rates of extreme poverty fell substantially.
Yet big challenges remain.

Olu Ajakaiye | Nine imperatives for progressive economic transformation in Nigeria


Nigeria has so far missed the opportunity to embark on progressive economic transformation as characterised by a reallocation of economic activities away from low- towards high-productivity activities. Rather, under the rubrics of laissez-faire policy and its associated aversion to development planning, during the high-growth era of 2000–14 Nigeria experienced a perverse form of economic transformation, whereby economic activities shifted from low-productivity agriculture and high-productivity manufacturing to other low-productivity other industry and services.

Paddy Carter (ODI) | Africa: What have economists got wrong?


Morten Jerven made a splash with his exposé of the woeful state of economic data in the developing world, Poor Numbers, and his second act Africa: Why Economists Get it Wrong has won him more fans. In this book he argues that economists were misled by cross-country growth regressions into thinking that Africa is incapable of development, and that by seeking to explain a failure of growth economists missed the chance to study historical growth episodes and show how Africa can grow.

29 August 2016 | Supporting Manufacturing in Kenya


The key questions explored at this roundtable were around Kenyan manufacturing: Why is productivity low in manufacturing? Why is informality not decreasing with economic growth? Why is there a lack of linkages between services on the one hand, and manufacturing and agriculture on the other hand? And what can be done about these challenges? The SET team is currently scoping out support for Kenya’s transformation with analytical and other inputs. The roundtable aimed to discuss and develop this collaboratively.

TICAD VI 2016 | Africa’s Industrialisation and Economic Transformation

ticad logo HQ

The SET programme will be participating at TICAD side events in partnership with (JICA and IDE-JETRO. Industrial development and economic transformation are crucial for Africa’s development, but there is a heated debate on how to achieve them. Three events will explore the respective roles of government and private sector in policy development and implementation for Africa’s industrialisation.

Linda Calabrese, Neil Balchin, Maximiliano Mendez-Parra (ODI) | 10 priorities for a smart regional integration agenda in Africa

A market stall holder in northern Uganda, December 2011. Northern Uganda was once the breadbasket of the country, but twenty years of war have ravaged the land and traumatised the people. 

Now that two million internally displaced people have returned home from camps, and refugees have come back from overseas, there is hope that the region can once again become a thriving base for agriculture. 

DFID is supporting the recovery of the region with a five year programme that has helped 10,000 vulnerable people to return home, provided vocational training for 4,000 young people who missed out on education, and is providing match-funding for the private sector to help kick-start the local economy.

Linda Calabrese, Neil Balchin and Maximiliano Mendez-Parra (ODI) 15 June 2016 Africa’s regional economic communities (RECs) are looking to achieve deeper regional integration that goes beyond reducing tariffs. This has generated greater focus on trade facilitation to ease the movement of goods across borders and promote economic transformation. A recent paper prepared jointly by the […]

Supporting the Preparation of Tanzania’s Second Five-Year Development Plan (FYDP II)

Dar es Salaam Port, Tanzania. Photo: Rob Beechey / World Bank

Neil Balchin, Tim Kelsall, Blandina Kilama, Alberto Lemma, Max Mendez-Parra, Donald Mmari, Dirk Willem te Velde, Sam Wangwe, Leah Worrall, May 2016

The Government of Tanzania launched the second Five-Year Development Plan (FYDP II) (2016/17-2021/22) in June 2016, focusing on the theme Nurturing Industrialisation for Economic Transformation and Human Development. This study informed the preparation of FYDP II.

Supporting Economic Transformation in Nigeria

Grand Mosque Abuja Nigeria

Dirk Willem te Velde, David Booth, Danny Leipziger and Ebere Uneze, May 2016
Nigeria has enjoyed fast economic growth over the past decade but has seen low-quality growth. Now, with oil prices down significantly, and weak growth, new areas of economic growth need to be identified. Business-as-usual will not safeguard productive jobs for the future or reduce poverty significantly. Promoting quality growth and economic transformation is crucial. This paper discusses the issues, drawing on economic analysis and political-economy assessment.

31 May 2016 | Supporting Economic Transformation in Nigeria

Dr Aisha Abubakar

Overseas Development Institute (ODI), in conjunction with DFID Nigeria publicly launched a new SET paper on Supporting Economic Transformation in Nigeria in Abuja on 31st May 2016. The paper written by Nigerian and international experts draws on international experience from large developing countries that have managed to transform the structure of their economies, as well as the record of economic transformation and economic policy in Nigeria to date, to chart a way forward for Nigeria’s economic transformation efforts.

Sonia Hoque (ODI) | National strategies for African transformation: how to make it happen


Economic transformation now has the attention of African leaders. National strategies with the goal of economic transformation need to be developed inclusively and ultimately have the buy-in of citizens. Those developing them must be prepared to move from technical, rigid documents with unrealistic targets, to flexible, visionary ones, led by “politically savvy leaders” and supported by citizens who hold them to account. These were among the key messages emerging from the first African Transformation Forum (ATF) in Kigali in March 2016.

Developing Export-Based Manufacturing in Sub-Saharan Africa

Dignity factory workers producing shirts for overseas clients, in Accra, Ghana on October 13, 2015. Photo © Dominic Chavez/World Bank

Neil Balchin, Stephen Gelb, Jane Kennan, Hope Martin, Dirk Willem te Velde and Carolin Williams, March 2016
Strong growth in the African region, rebalancing and rising wages in China, and improvements in the policy and institutional context provide a unique opportunity that African countries can use to attract investment in higher value-added, export-led manufacturing. This paper describes how production, employment, trade and FDI in the manufacturing sectors in nine selected Sub-Saharan African (SSA) countries has increased and identifies opportunities for promising sectors.

Gender, Economic Transformation and Women’s Economic Empowerment in Tanzania

A woman mixing dough to make bread in the town of Masi Manimba, DRC

Louise Fox, March 2016. The government of Tanzania is currently preparing its next Five Year Development Plan (FYDP II). Ensuring women benefit from the development processes envisaged in the plan is instrumental to achieving its objectives. Analysis of recent data on employment and time use shows women have benefited from a decade of economic transformation in Tanzania. This paper discusses many issues, including how they have gained access to new employment opportunities in higher-productivity sectors such as manufacturing, trade and hotel and food services and the expansion of public services has increased the education of women in in the labour force.