1. Comments Industrialisation, Private Sector Development and Economic Transformation in Africa
Dirk Willem te Velde
(Overseas Development Institute)
TICAD VI Nairobi
28th August 2016

2. Wage and productivity gaps / failed connections in Africa
Large / small firms within sector
Foreign / domestic firms
Services / manufacturing / agriculture
Rural / urban
Between Asia and Africa (levels / changes)
Global and regional exporters / domestic markets
How much are these gaps hampering industrialisation? Should we go back to the notion of balanced growth as a policy objective? Building linkages / fostering co-ordination

3. Seizing the (African manufacturing) moment
Past
Future?
High absolute wages in Africa
Import substitution in weak domestic markets
Weakly implemented EPZs
Weak policies and no active support for private sector
Weak skills and infra
Relatively rising wages in Asia
Competitive manufacturing with growing markets
Clusters / agglomerations and well managed SEZs
Active support by public sector for private sector (addressing co-ordination failures)
Support for skills / infra

4. Policy design and implementation
In past bad policies (Ikiara/Fukunishi)
There are opportunities (Gelb)
BUT, also
Heterogeneity in quality of implementation
Lack of political incentives, lack of central co-ordinating agency, lack of quality state-business relations
Learning from Japan?

5. Summary of TICAD VI - JICA-ODI meeting on Industrialisation in Africa: Kaizen and beyond
KAIZEN is a bottom-up complement to the top-down investment climate instrument and important for Africa’s industrialisation
KAIZEN has been implemented flexibly in 8 African countries: ranging from being well-embedded in govt strategies (Ethiopia), to starting with small scale industry (Ghana) or in large firms (Kenya).
KAIZEN works; saving $100mn in Ethiopia in 4 years and improving Kenya’s GM East Africa plant labour productivity by more than 5% p.a
KAIZEN is about worker motivation, team working and a shift in mind set
KAIZEN is only the start: other government policies (skills, technology transfer) are also needed for industrialisation
KAIZEN will be supported further by JICA and NEPAD through a KAIZEN platform that can help public-private dialogue
Source: TICAD VI meeting, 27 August 2016,