African industry in decline1996

This study is motivated by the desire to understand the reasons for the slow and difficult process of industrial development in most of sub-Saharan Africa in the 1980s - a period of economic crisis and subsequent structural adjustment. While in the 1980s other parts of the developing world took major strides towards industrialization, most African countries stagnated and declined. In the late 1960s and the most of the 1970s industrialization in Africa had recorded impressive achievements. State participation in production was high yet private sector firms also thrived in this period. But towards the end of the 1970s and continuing into the 1980s over-capacities developed and, with a lag, investment growth slowed down, with negative rates of growth of manufacturing value added recorded in the 1980s. Stabilization and structural adjustment policies came to dominate the macroeconomic policies of most African countries, exposing the weaknesses of many industrial sectors. Yet no coherent policies focusing explicitly on the industrial sector were adopted.