Neil Balchin (ODI) | Mozambique needs to act now to avert a jobs crisis


Neil Balchin (Research Fellow, ODI) 16 October 2017 Many countries in Africa are facing a looming jobs crisis. According to the African Development Bank, only one-fifth of the 12 million young people entering African labour markets each year are able to find waged employment. Rapidly expanding working-age populations on the continent only intensify competition for […]

Judith Tyson (ODI) | Three priorities for post-Brexit UK policy on private investment in low-income countries


Judith Tyson (Research Fellow, ODI)
In 2017, the UK government put economic growth at the core of its development policy by publishing its first ever economic development strategy. Concurrently, there was greater focus on the post-Brexit agenda of international opportunities for UK trade and investment. A key part of this agenda is increasing UK trade and investment in low-income countries (LICs) with the dual goal of creating positive development impact and greater opportunities for UK companies. To be able to achieve this dual goal, which represents an opportunity for both the UK and LICs, recent ODI work on private finance suggests there are three key areas of focus in the short term.

Dirk Willem te Velde (ODI) | Supporting Kenya’s industrialisation: Mombasa port, SEZs and targeted development cooperation


Dirk Willem te Velde (Principal Research Fellow, ODI)
The SET programme has highlighted Kenya’s lagging industrialisation, characterised by falling manufacturing to GDP ratios in the past few decades. Nonetheless, there is a real opportunity in the coming few years to get it right, doubling manufacturing output and creating 300,000 manufacturing jobs in the country. This will require implementation of a range of appropriate policies.

Sonia Hoque (ODI) | Ethiopia’s economic transformation and job creation: the role of Hawassa Industrial Park


Sonia Hoque (Programme & Operations Manager, ODI)
In the quest for faster industrialisation and economic transformation, governments in Sub-Saharan Africa (SSA) have established a number of special economic zones (SEZs) and industrial parks. At the ACET-ODI Light Manufacturing in Africa Chapter launch on 5 June 2017 (part of the Pan-African Coalition for Transformation, PACT), these zones were a hot topic. Given past stigma around SEZs foreign investors, participants from SSA were keen to learn from each other, and in particular from Ethiopia.

Linda Calabrese (ODI) | Four ways to help East African manufacturing


Linda Calabrese (Senior Research Officer, ODI)
Manufacturing has finally taken a central place in the policy and economic debate in East Africa. Not so long ago, industrialisation was largely ignored but it is now widely understood that the manufacturing sector is crucial in creating employment and spurring growth in the region. The second East African Manufacturing Business Summit in Kigali brought together regional institutions, national governments and private sector bodies from East African Community (EAC) countries to discuss the future of East African manufacturing.

Linda Calabrese & Stephen Gelb (ODI) | Are factory jobs good for the poor? Evidence from Myanmar


  Linda Calabrese (Senior Research Officer, ODI) & Stephen Gelb (Principal Research Fellow – Team Leader, private sector development, ODI) 27 June 2017 Recently The New York Times published an article by Christopher Blattman (Columbia University) and Stefan Dercon (Oxford University and DFID) questioning the poverty-reduction effect of sweatshop work in developing countries. They carried […]

Phyllis Papadavid (ODI) | How a weaker US dollar could support economic transformation

In this photo, an Ebola Treatment Unit is being built in Kerry Town. British Armed Forces are in Sierra Leone in support of Operation GRITROCK. The Vanguard enabling brigade is deployed in order to assist with the Ebola crisis.

  Phyllis Papadavid (Senior Research Fellow – Team Leader of International Macroeconomics, ODI)  19 June 2017 Further US dollar weakness The US dollar rose by 5% in trade-weighted terms following the US election of President Trump in November 2016.[1] Since its peak at the end of December 2016, the dollar has reversed all of its post-election rise […]

Phyllis Papadavid (ODI) | What ‘stagflation’ means for economic transformation


  Phyllis Papadavid (Senior Research Fellow – Team Leader of International Macroeconomics, ODI)  15 May 2017 ‘Stagflation’ risks could rise According to the International Monetary Fund (IMF), recent global manufacturing activity and global trade is showing some signs of recovery. The start of 2017 saw world trade volumes expand by an average 10% annualised rate, compared to […]

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.

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

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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 […]

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


Rising wages for unskilled workers in China signals that low-cost manufacturing may start to lose its competitive limit. [1] Our own ongoing background work suggests that from 2009 to 2014, China’s real manufacturing wages increased by an annual average of 11.4%, even though this was in the aftermath of the worst financial crisis since the Second World War. Both foreign multinationals located in China and Chinese manufacturers that are engaged in labour-intensive production in China are therefore actively seeking to relocate to new low-cost destinations.

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.

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.

Neil McCulloch | How not to diversify: Nigerian style

Credit: Jeremy Weate via Flickr

‘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.

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.

Olu Ajakaiye | Nine imperatives for progressive economic transformation in Nigeria

Credit: World Bank Group

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?

Credit: Antony Robbins

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.

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 […]

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.

Helen Hai | Made in Africa: a practical initiative to jumpstart African manufacturing


Africa can become the next manufacturing hub for global markets. The Made in Africa Initiative aims to help the continent capture the window of opportunity for industrialisation arising from the pending relocation of light manufacturing from China and other emerging market economies. By capturing this opportunity, Africa will achieve sustainable, dynamic and inclusive growth. What Africa needs now are success stories, to provide the aspiration, confidence and experience necessary for it to realise its potential in terms of industrialisation and shared prosperity. The Made in Africa Initiative hopes to create such successes in African countries.

Ganeshan Wignaraja (ADB) | Building global supply chains for economic transformation: lessons from Asia

City landscape, Tianjin

The world’s trade ministers are concentrating on the outcome of 10th World Trade Organization (WTO) Ministerial Conference in Nairobi and its aftermath. The intense discussions under the Doha Development Agenda seek to advance a multilateral trade deal and to restore credibility in the WTO’s trade negotiating function. But the real issue for trade ministers is whether latecomer African economies can emulate the success of first mover East Asian economics in joining global supply chains and achieving rapid economic transformation.

Dirk Willem te Velde (ODI) | Realising the potential of trade in economic transformation

Peace Bridge leading to central Ulaanbaatar. The city's skyline has transformed in recent years. Photo: Dave Lawrence / World Bank

Promoting quality growth and economic transformation is crucial to sustained progress and job creation. Trade plays a special role in this process but unfortunately this is not always acknowledged in policy design or realised in practice. New ideas in trade related to identifying niches in value chains, nudging firms towards exporting or facilitating services trade fail to make it onto the radar screen of policymakers, who may instead choose to stick with unrealistic targets for old-style full-blown industrialisation. It requires hard work to embed new thinking on trade in the mind set of policy makers.

Pedro Martins (UNECA) | Structural change: concepts, data and methodologies

Copyright creative commons

Structural change is back in fashion. After a promising start in the mid-20th century – owing to the seminal works of Allan Fisher, Colin Clark, Simon Kuznets and Hollis Chenery – the topic was subsequently relegated to obscurity during the years of structural adjustment (a rather different concept!). It remained sidelined in the 2000s, when the attention of the research and policy communities was mainly devoted to the Millennium Development Goals and their focus on social outcomes.

Steve Wiggins (ODI) | Tracking agricultural transformation – if measuring productivity is hard, should we focus on rural wages?

Credit: Danilo Pinzon / World Bank

As low income countries (LIC) grow and transform their economies, agriculture plays a key role. It has to raise production to feed increasing numbers living in towns, as well as to provide raw materials to domestic manufacturing — cotton for textiles, hides for shoemakers, palm oil for biscuit and cake makers, etc. For LICs lacking oil, gas, minerals, and substantial manufacturing, agriculture will probably be the largest source of exports to finance imported capital goods. With populations still largely rural, it helps domestic manufacturers if agricultural incomes rise since this expands the domestic market. Last, and certainly not least, agriculture has to free up labour for manufacturing and services — and, depending on the effectiveness of the financial system in rural areas — it may also transfer capital to other sectors.

Dirk Willem te Velde (ODI) | The future of economic transformation in Africa

Construction workers on site. Photo Arne Hoel World Bank

Having concluded the UN conference on financing for development in Addis Ababa in July and approaching the conclusion of new development goals at a UN summit in New York in September, this is a crucial time for the global community  to stand behind Africa’s priority objective of economic transformation. It will require  a sustained effort of discovering and experimenting with new ways of economic transformation, involving the right stakeholders from across society, led by African countries and supported by others as appropriate. The rewards are potentially huge, and early results look within reach.

Sehr Syed (Liberia Institute of Statistics and Geo-Information Services) | Beyond the numbers: the case of Liberia

© Jim Rush

Working as an ODI Fellow in the statistics bureau for Liberia, the Liberia Institute of Statistics and Geo-Information Services (LISGIS), I experienced at first hand the challenges of producing and obtaining statistics in a developing country environment, from logistical, technical and political aspects. It is widely agreed that some data is better than no data, and that generally data is as good as it can be, given the context, but this is true only to the extent that the country context is understood. Liberia provides an instructive example of an extreme case where data collection, and resultant indicators, may suffer as a result of constraints, whether logistical, financial, cultural, educational or otherwise. I briefly discuss a very limited number of these below.

Gaaitzen de Vries (University of Groningen) | Rebasing sector GDP time series

Nigeria © Creative Commons

Gross value added (VA) in current and constant prices by sector is normally available from the National Accounts (NA). As these accounts are compiled according to the UN System of National Accounts, international comparability across countries is high, in principle. However, national statistical offices frequently update their methodologies.