CGD in the News

Technology Cannot Solve All Of Africa’s Problems, But It Can Help With Many (The Economist)

November 9, 2017
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From the article:

Asian countries such as Japan and later Taiwan, South Korea and China embraced many of the world’s latest technologies to build formidable manufacturing economies. But Africa was largely left out of the most recent waves of globalisation, in which labour-intensive manufacturing moved out of Europe and America and into Asia. In 1990 African countries accounted for about 9% of the developing world’s manufacturing output. By 2014 that share had slumped to 4%.

One reason was pinpointed in a recent study by economists at the Centre for Global Development in Washington, DC. It found that labour costs in Africa are about 60% higher than in comparable countries such as Bangladesh. More striking still, the capital cost of employing a worker in Kenya, at $10,000, is about nine times as much as in Bangladesh. This is partly because indirect costs caused by unreliable infrastructure, crime, corruption and poor regulation, among other things, can account for 20-30% of the total costs incurred by firms in Africa...

So can technology help change the fortunes of Africa, or should the region’s governments focus on getting ports and power to work? 

Read full article here.