Stages of development and possibility of industrialization of African Countries

Abstract

Can Africa Compete? Yes, it can if it is competitive. But how can Africa be competitive? Heckscher-Ohlin theorem, the most important one in the field of international economics, states that nations export goods that intensively use their relatively abundant factor and import those goods that embody the relative large amounts of the scarce factor. This type of trade brings more profits to the countries involved, thus makes African countries competitive.

This study empirically clarified that African countries are very labour abundant, in fact much more than most Asian countries, and carefully chose industries which make Africa competitive. Findings are;

① As for the kind of industry, clothes and textile goods industry, precision machine industry, textile industry and electrical goods industry are recommended, because of their labour intensiveness, ample volume circulation in the world economy and high backward linkage effects to the domestic economy.

② Diversification in labour intensive industries, especially with making connection to other industries, is also of paramount importance.

Messages here are loud and clear. African countries, with small local market and with low capital intensiveness, should take labour-use industries and export goods made there for their industrialization. There are industries that suit the stages of development of African countries.