Industrialisation And Economic Growth In Africa: Evidence From Highly Industrialised African Countries

Abstract

This study examines the impact of industrialisation on economic growth in Africa, with particular attention to highly industrialised countries. Panel data of 20 sampled nations were sourced from the World Bank’s World Development Indicators, covering the period from 2002 to 2024, and Panel fixed-effects estimation with Driscoll– Kraay standard errors was employed. This estimation technique is appropriate given evidence of heteroskedasticity, first-order serial correlation and cross-sectional dependence in the panel data. Economic growth, measured by GDP, is specified as the dependent variable, while industrial output constitutes the principal explanatory variable. Lagged GDP, foreign direct investment, value of merchandise exports and exchange rate are included as control variables. The empirical findings indicated that industrial output has a positive and statistically significant effect on economic growth among the highly industrialised African countries. More importantly, this finding supports the view that industrial expansion contributes to structural transformation by increasing productivity, creating employment, promoting technological progress, and strengthening linkages with other sectors of the economy. The study concludes that industrialisation constitutes an important pathway to economic growth in Africa. It is recommended that governments should continue to prioritise industrialisation as a central pillar of national development strategies. Public investment should focus on expanding manufacturing capacity, agro-processing, mineral beneficiation and value-added production to reduce dependence on primary commodity exports.