Growth sectors, dynamics and distribution

EMERGING EVIDENCE ON THE RELATIVE IMPORTANCE OF SECTORAL SOURCES OF GROWTH

What is the leading sector in African economies? Historically, agriculture has been so identified. Ogunleye (this volume), however, finds that since the 1980s service has become the leading sector in SSA. This result occurs in large part because this sector has seen a significant shift in employment towards the upper end, led by the telecommunications subsector, thanks in large part to major developments in ICT. Hence, while agriculture remains important (indeed, Ogunleye places this sector as second in importance), efforts must be directed toward facilitating the operation of especially the high-valued segment of the service sector. In particular, and consistent with Onyeiwu (this volume), the subsector’s high potential to raise productivity across all sectors of the economy implies that ICT should be accorded a disproportionately significant priority.

TOURISM AND ECONOMIC GROWTH

Tourism is among the key subsectors contributing to the rise of service as a leading sector in Africa (Ogunleye, this volume). Seetanah et al. (this volume) specifically explore the extent to which tourism affects economic growth, based on a 1990-2006 panel of 40 African countries. They find that the sector significantly promotes economic growth and that the relationship is reinforcing, since growth conversely raises tourism. The fundamental causes of tourism, in turn, include private investment, openness and human capital. Thus strategically investing in tourism, by providing significant attention to these fundamental factors, should yield growth dividends for many African countries.