At the fifth Tokyo International Conference on African Development (TICAD) that took place in Tokyo in 2013, Joseph E.Stiglitz made an excellent speech that is more newsworthy than ever. Indeed, he shared with the audience his thoughts about strategies and challenges confronting African development, and how industrial policy plays a crucial part in the development of the continent. Indeed, Africa has experienced robust growth during the 21st century, mainly driven by rising commodity prices and the extraction of minerals. Now is the time to address concerns about the quality of this growth: indeed, much of the population of the continent has not yet shared this wealth creation. Poverty remains rampant, inequality is dramatically palpable in many countries, young people who have done everything they should cannot find jobs and feel the system has failed them. These are the reasons why we need to put Africa on the path of a growth that is both inclusive and sustainable, not only economically, but politically, socially, and environmentally. It is surprising to see that services have become the leading remunerative sector on the continent, more so than agriculture or industry. But this has not created the quantity of jobs likely to result from manufacturing and labour-intensive production!
Thus industrialization is key for Africa to foster structural transformation and improvement in standards of living. Industrial policies will indeed facilitate the structural transformation of our economies. It is a real challenge for Africa as the continent will have to take into account many things at the same time: for instance, industrial policies will have to focus on ensuring the adoption of technologies that are environmentally sensitive. Innovation and investment need to be focused on protecting the environment and creating jobs. Therefore, industrial policies will have to promote inclusive growth with high levels of employment, creating a learning society, creating livable cities, improving agricultural productivity, including reforming, and land tenure systems, where appropriate. The objective is ambitious but it is achievable: the fact that some African states may not have the institutional capacity should not be an impediment for the potential investors. Political and market institutions in those countries need to be reinforced altogether: each can help the other, and each can serve as a check against the abuses of the other.
As a conclusion, today we need to change our perspectives on growth and on-going changes in Africa. Active industrial policies can actually transform African economies by reducing inequalities (that lead to instability) through jobs creation and getting out of external dependence to commodity price shocks, which makes the continent vulnerable. And last but not least, industrialization will also allow governments to make long-term investments in infrastructure, skills formation and capacity building. A virtuous circle then that will contribute to the strategic position of Africa on the international stage.