Noah Smith claims that African industrialization has to be among the most important things happening in the world right now.
The vast continent, with more than 1.2 billion people, is home to an increasing fraction of the human beings who are still mired in extreme poverty. By 2030, the World Bank projects that almost all the people in extreme poverty will live in sub-Saharan Africa. The reason is twofold. First, Africa’s population is growing rapidly. Second, Africa has lagged in the industrialization necessary to generate mass employment. The lack of strong, stable governments — a legacy of colonialism — has made it difficult to provide the education, infrastructure, court systems and other public goods that help prepare countries for the leap from subsistence farming to factory work.
In her book “The Next Factory of the World: How Chinese Investment Is Reshaping Africa,” Irene Yuan Sun — a development-aid worker turned McKinsey & Co. researcher — describes the wave of private Chinese investment sweeping the African continent. This investment often goes overlooked by the international press, which tends to focus on China’s splashy government-backed infrastructure projects and loans. But what Sun describes is something else — Chinese businesspeople moving to Africa and building privately owned factories.
In 2017, Sun’s research team estimated that there are about 10,000 such factories on the continent, and the number is surely higher now. Nigeria, Zambia, Tanzania and Ethiopia have the largest concentrations, but many other countries are in the mix. Although China still has less total capital invested in Africa than in other regions, it’s catching up fast.
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