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Industrial Strategies for Economic Recovery and Long-term Growth in Africa* January 201 1 Arne Bigsten and Måns Söderbom Department of Economics Gothenburg Centre of Globalization and Development University of Gothenburg Box 640 SE 405 30 Gothenburg Sweden Email: arne.bigsten@economics.gu.se, mans.soderbom@economics.gu.se Abstract: Despite a decade of rapid economic growth, Africa’s industrial sector remains underdeveloped. In this paper we explain why improved economic performance in the industrial sector is important for Africa’s long-term growth, and discuss the prospects for accelerated industrialization in the continent. We distinguish between macroeconomic aspects, factors related to the investment climate, and the role of skills at the level of the enterprise. We also discuss the theoretical underpinnings of industrial policy, as well as implementation problems. JEL-Codes: D21, F14, O14 Keywords: Africa, industry, manufacturing, policy. ___________________________________________ *The authors would like to thank participants in the African Economic Conference 2010 in Tunis and an anonymous referee for helpful comments. We are also grateful for financial support from Sida-SAREC within the project Global Development and Poverty Reduction: The Role of Institutions and Policies. 1. Introduction The economies of Sub-Saharan Africa (Africa from here on) saw increasing per capita incomes for about a decade, up until the 2008 financial crisis. Towards the end of that period incomes were growing faster than in the developed countries, although not as fast as in the successful emerging economies in Asia. The economic set-