By building a service industry based on agriculture and information technology, Africa has successfully managed to created a new identity as a land without 'smokeless development'.
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The sub-Saharan countries of the African continent are forging new identities in their post-independence period. Natural resources have certainly helped them along the way, but they are also moving ahead with countries rich in natural resources. Since 1990, the pace of development in countries such as Ethiopia and Rwanda has been similar to that in East Asia. By building a service industry based on agriculture and information technology, Africa has created a new identity as a land without 'smokeless development'.
Now the important question in such a situation is, is it possible to maintain the current performance, or can it be sustainable? Of course, global trade is booming and interest rates are low. Africa has so far benefited from such favorable developments in the outside world. The flow of private capital investment is also steadily increasing, with the support of the authorities. Is constantly increasing.
On the one hand, the rapidly developing China has created a huge demand for natural resources in the region. As a result, there is an incentive to invest directly in the African economy. However, the long-running recession in China and the rest of the world in recent times has raised questions about whether Africa's growth momentum will be sustained in the long run.
Africa has so far benefited from such favorable developments in the outside world. The flow of private capital investment is also steadily increasing and is being complemented by support from the authorities.
The real problem here is that the economic system is weak in accepting change. Following in the footsteps of what developed countries did for their own growth after the Industrial Revolution, East Asian nations developed rapidly in a very short period of time. They transformed their farmers into productive workers. They diversified the economy and, most importantly, gave priority to large-scale exports of sophisticated goods.
Gradually, a similar process is taking place in Africa. Some recent research has shown that the rate of change in the shape of the African economy is so low that, in fact, the challenges facing policymakers have increased. The African Development Bank, the United Nations Economic Commission for Africa, the African Union, and the Center for Economic Transformation in Africa have all expressed concern over the nature and pattern of economic change in the region.
Historically, changes in the structure of any country's economy have been caused by the industrial sector, especially the manufacturing sector. But Africa's experience with industrialization to date has been unsatisfactory. According to 2014 figures, the share of manufacturing in sub-Saharan Africa was only 10 per cent in 1970, with no change. So many experts are now naturally questioning the slow pace of industrialization here, and at the same time questioning whether Africa's growth rate will continue.
At the same time, due to the rapid changes in the information technology sector and the rising cost of transportation, many industries here are now moving out. When the statistics on the current economy were presented, there was skepticism about the extent of opportunities for the mining, manufacturing, service and construction sectors. Of these, the manufacturing sector was considered to be the biggest hurdle, with many arguing that the manufacturing sector would be a major factor in the process of structural change in the local economy.
In recent times, industrial agricultural products and a variety of service industries have sprung up in the region. Importantly, these industries include manufacturing industries, all of which are unique. The key features of these industries are tradeable products, the diverse characteristics of each worker, and the working class with minimal knowledge of modern skills. All these sectors are also benefiting from the growth in the agricultural sector and changes in technology. Not only that, but these developments have created a new identity for Africa, the development that has been achieved without smoke.
In recent times, industrial agricultural products and a variety of service industries have sprung up in the region. All these sectors are also benefiting from the growth in the agricultural sector and changes in technology. Not only that, but these developments have created a new identity for Africa, the development that has been achieved without smoke.
A recent study found that the emerging business industries, such as the information technology-based services industry, tourism and transportation, are undergoing a new wave of structural change in Africa. Importantly, the growth rate of these industries is even higher than the growth rate of the manufacturing sector. For example, the growth in exports of service industries from 1998 to 2015 has been six times faster than the growth of exports of salable goods in this sector.
In addition, another study found that Rwanda, Kenya, Senegal and South Africa have developed multidisciplinary services industries based on information communication technology. The share of tourism revenue in the total revenue of Rwanda is about 30% of the revenue from exports. In a sense, the tourism sector is one of the biggest contributors to Rwanda's economic growth. In 2014, tourism revenue accounted for 3% of South Africa's gross national product. At that time, about 9.5 million tourists had visited the country. Ethiopia, Ghana, Senegal and Kenya are now actively participating in the value chain of global horticulture.
A recent study found that many of the characteristics of commercial services, agro-based industries as well as other conglomerates and manufacturing sectors are similar. The nature of the global expansion of the manufacturing sector is in fact based on a number of important factors, namely the investment climate and export potential. And this increases the likelihood of a strategic plan for structural change.
Infrastructure, skills and competition are important factors in the environment for investment. With this in mind, governments at present need to make a concerted effort to address the issue of infrastructure. In addition, these governments should play a cooperative role in increasing the productivity of many industries in Africa. Governments here need to implement a wide range of export-oriented policies, and at the same time repeal many of the rules and regulations that hinder export growth in the region as a whole.
If countries in Africa invest in the creation and growth of special economic zones, it can provide great support to information technology-based service industries such as agro-processing industries, horticulture and manufacturing. In this context, Kenya's efforts to create and grow a special information communication technology sector for job creation are a good example. But if we want to create meaningful employment opportunities for young people here, there is a need for governments to invest more in creating a special economic zone for information technology.
All in all, if we want to make a meaningful conclusion to the characteristic structural transformation that is currently taking place across Africa for a non-smoker industry, all of this needs to be considered from a broader perspective. With the growth of new areas, new and complementary avenues for structural transformation are also emerging. Many such new businesses and ventures have already begun the process of accommodating Africa's youth. In fact, it is up to the planners of the economy to decide. They also need to make an effort to make the decision process meaningful. The focus should be on the proper treatment of new methods of structural transformation in Africa and the adoption of best practices in developed economies.
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