Sub-Saharan Africa (SSA) is home to the world’s poorest countries. The region’s geographical disadvantages are often viewed as an important deterrent to its economic development. A country’s geography directly affects economic development through its effect on disease burden, agricultural productivity or the availability of natural resources. However, the new economic geography (NEG) literature, initiated by Krugman (1991), highlights another mechanism through which geography affects prosperity.
For many African countries, one important way to create productive jobs is to grow the labor-intensive light manufacturing sector, which would accelerate economic progress and lift workers from low-productivity agriculture and informal sectors into higher productivity activities.
Sub-Saharan Africa’s low wage costs and abundant material base have the potential to allow light manufacturing to jump-start the region’s long-delayed structural transformation and over-reliance on low-productivity agriculture. Moreover, as globalization advances and China evolves away from a comparative advantage in labor-intensive manufactured products toward more advanced industrial production, African economies such as Ethiopia and Tanzania are uniquely positioned to take advantage of this opportunity.
The World Bank recently launched its ‘Education Strategy 2020’ which focuses on achieving ‘learning for all’ over the next decade. The strategy emphasizes looking beyond inputs (classrooms, teacher training, textbooks, computers) to outputs such as cognitive skills and skills for critical thinking (read Elizabeth Kings’ post on this). The strategy emphasizes this approach through the slogan ‘invest early, invest smartly, invest for all.’