Source: The Conversation, 2 August 2020, photo credit: World Finance
Most economists see structural transformation as one of the main routes to Africa’s sustainable development. What it means is changing the share of agriculture, manufacturing and services in an economy. It is a central aim of the African Union’s Agenda 2063.
With this aim in mind, economists and policymakers need to know what determines structural transformation. They have flagged factors like demand for goods and services, trade policies, financial development, institutional quality and economic integration.
But researchers haven’t closely examined the way economic integration through trade and finance influences structural transformation.
I therefore set out to study African countries’ integration with the rest of the world and the effect of that integration on their structural transformation. This study provides fresh evidence about whether integration is good for Africa. It also unearths the right levels of integration necessary to increase structural transformation.