Exporting out of China or out of Africa?
Within the broader context of latecomer industrialisation, the report reviews the prospects of Sub-Saharan African (SSA) countries to replicate the “Asian model” of export-oriented growth based on attracting foreign investments in light manufacturing as a springboard for industry-led economic development.
The report focuses on the clothing industry and whether SSA countries can hope to become major export locations for clothing firms, taking advantage of rapidly rising wages in China – the world’s leading exporter that currently accounts for almost one-third of global clothing exports. While clothing sector investments have recently been shifted to Asian low-wage economies, such as Cambodia, Vietnam, Myanmar and
Bangladesh, there is a growing inclination to also consider SSA locations. It critically reviews tje prospects for this scenario to continue and expand.
The key research questions asked include: Can some SSA countries become major clothing exporters, filling the space vacated by China as the latter climbs up the technology and productivity ladder? Or will firms stay in China due to the agglomeration effects of established industry clusters? Will at least some African countries with good business environments be able to capitalise on their low wages as a competitive advantage? What will it take to benefit from this opening window of opportunity and what may be obstacles along the way that call for industrial policy interventions?