Economic Development in Africa Report 2015
20
more than 100 per cent of real GDP growth, offsetting negative growth in the other two sectors. The international competitiveness of African manufacturers is negatively impacted by high indirect costs related to infrastructure services. Inadequate infrastructure services remain a major obstacle to achieving full economic growth potential in Africa. Addressing Africa’s infrastructure will require a substantial programme of investment, estimated at $93 billion per year (Foster and Briceño Garmendia, eds., 2010) Improved infrastructure and provision of services has the potential to contribute to growth in the manufacturing sector in Africa, a sector where the competitiveness of African firms is weak. The cost structure of firms and particularly the difference between the direct and indirect costs of production have a bearing on the weak competitiveness of African manufacturing. One study shows that the overall level of profitability of African firms, which is much lower than elsewhere, results from high indirect costs (Eifert et al., 2008). Firms in developing regions with a stronger Figure 1. Sectoral shares of real gross domestic product by percentage and value, 2000–2012 100
700,000
90
600,000 500,000
70 60
400,000
50 300,000
40 30
200,000
20 100,000
10 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Left axis:
Agriculture
Industry
Services
Right axis:
Agriculture
Industry
Services
Source: UNCTAD secretariat calculations, based on data from UNCTADStat.
Va l ue in real terms (million $)
Real GDP (percentage)
80