Owusu Pens Article on Rethinking Africa’s Path to Productivity Growth
In a newly article published by The World Bank Research Observer, “Taking Stock of Africa’s Economic Transformation: Rethinking Sources of Productivity Growth,” Solomon Owusu, Assistant Professor of Global Economic Policy at the Pardee School, and his collaborators, Douglas Gollin, Margaret McMillan, Emmanuel Mensah, and Gideon Ndubuisi, reexamine one of development economics’ most enduring questions: how African economies are actually growing and why productivity gains have remained modest.
Drawing on newly expanded datasets covering up to 51 African countries, the authors show that recent growth has indeed been “growth‑enhancing,” but it has not followed the classic industrialization pathway. Instead, Africa’s transformation has been driven largely by labor moving out of agriculture and into services, even as manufacturing, long seen as the engine of development, “has played a limited role since the 1990s.”
The article highlights a central empirical finding: services, particularly wholesale and retail trade, now account for the bulk of Africa’s structural change. This shift has raised productivity relative to agriculture, but the gains remain constrained. As the authors note, much recent reallocation has been toward sectors that are “more productive than agriculture but still below the economy’s average,” limiting aggregate growth potential. Trade data reinforce this picture, showing that services are increasingly contributing to export earnings and jobs, challenging the assumption that services are inherently non‑tradable or domestically bound. At the same time, productivity growth within sectors, especially within informal services, has been weak, raising concerns about the sustainability of current growth patterns.
Rather than prescribing a single sectoral fix, Owusu and his co‑authors argue for a broader rethinking of development strategy. Manufacturing, they caution, remains important but cannot be treated as a silver bullet in a world of capital‑intensive production and shifting global value chains. At the same time, a services‑led strategy will disappoint if foundational constraints are ignored. Africa’s modest productivity growth, they argue, reflects “deeper structural constraints,” including limited access to electricity, poor transport infrastructure, weak health outcomes, low educational attainment, and widespread extreme poverty that suppresses domestic demand. Without addressing these barriers, even well‑designed policies are unlikely to yield sustained transformation.
The article ultimately calls for an African‑led development strategy that focuses less on replicating historical models and more on enabling productivity “wherever it emerges.” Rather than privileging manufacturing alone, the authors emphasize investments that cut across sectors, such as human capital, infrastructure, and market integration, that allow labor, firms, and ideas to move into more productive uses. In doing so, the paper reframes Africa’s economic transformation not as a failure to industrialize, but as an ongoing process that requires new analytical tools, more realistic expectations, and policy agendas grounded in the continent’s actual economic dynamics.
The full article can be read here.
Solomon Owusu is an Assistant Professor of Global Economic Policy at the Frederick S. Pardee School of Global Studies at Boston University and a Core Faculty Member of the Global China Initiative and the Global Economic Governance Initiative at the Global Development Policy Center. Before joining Boston University, he was a Postdoctoral Researcher at the Oxford Martin Program on the Future of Development at the University of Oxford. He also held a Research Economist position at the German Institute of Development and Sustainability in Bonn, Germany. He has worked with the World Bank, UNIDO, and Ghana Statistical Service and worked on projects for the European Commission and Asian Development Bank. He holds a Ph.D. in Economics from Maastricht University/UNU-MERIT in the Netherlands.