Structural Transformation in Africa

Policy Research Working Paper 7743 WPS7743 Structural Transformation in Africa A Historical View Maria Enache Ejaz Ghani Stephen O Connell Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Macroeconomics and Fiscal Management Global Practice Group July 2016

Policy Research Working Paper 7743 Abstract This paper presents evidence suggesting that the relationship between income and economic structure is shifting over time, with countries across the income distribution uniformly increasing the share of labor in service sectors and an increasingly less stark relationship between manufacturing intensity and gross value added per capita. The paper then assesses historical patterns of productivity convergence at a more detailed sector disaggregation than has been previously available. The analysis finds suggestive evidence that, at least in recent decades, convergent pressures in services industries are stronger than in manufacturing. Focusing on African economies, the paper presents a country-by-country historical analysis of structural change over the past four decades. Given the varied patterns and trends in structural change across African countries, it is difficult to characterize structural change from a single, continent-wide perspective. Some countries saw an early transition of labor out of agriculture, with manufacturing absorbing this labor in the decades prior to the 1990s, while another group of countries saw a later transition out of agriculture, where the services sector played a large role in labor reallocations in the 1990s and 2000s. Finally, the paper provides a country-by-country structural transformation scorecard to assess patterns of structural change in jobs and growth. This paper is a product of the Macroeconomics and Fiscal Management Global Practice Group. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted at EGhani @worldbank.org. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Produced by the Research Support Team

Structural Transformation in Africa: A Historical View Maria Enache, Ejaz Ghani, and Stephen O Connell Keywords: Africa, Growth, Jobs, Structural Transformation. Contact information. Enache: World Bank, mariavenache@gmail.com. Ghani: World Bank; eghani@worldbank.org. O Connell: City University of New York; soconnell@gradcenter.cuny.edu.

Introduction A new and a more optimistic narrative on Africa s growth and structural transformation has emerged from a series of high level reports the 2014 African Transformation Report (ACET 2014), the African Union s Agenda 2063 (AU 2015), the African Development Bank s (ADB 2015), the UN Economic Commission for Africa s 2013 report (UNECA 2013), UNCTAD s 2012 report on structural transformation (UNCTAD 2012), multiple recent IMF papers (IMF 2013, among others), which point to the fact that Africa s recent progress is not based solely on natural resources (McKinsey Global Institute 2010). A recent report by the World Bank on economic transformation and poverty reduction in Africa found that the region s economies are developing in unexpected ways. The region is largely bypassing industrialization as a major driver of growth and jobs (World Bank 2014). The demographic dividend will make the region s labor force much larger and better than that of any nation, including China or India, if the young children in Africa could be better educated than in the past (Fine and Lund, 2012; The Economist April 2016). Africa s recent economic performance has vastly improved: its annual growth rate approached 3% in per capita terms after 2000. Rodrik (2014) claims this growth is not just driven by investment, but also by total factor productivity growth seen for the first time since the 1970s. While there was growth during the 2000s, the economic decline prior to this decade was so profound that many countries have yet to catch up to post-independence income levels. The historical empirical reality shows that with the exception of the European periphery and East Asia, convergence has been the exception rather than the norm. Growth theory has adapted to empirical realities by differentiating between conditional and unconditional convergence: growth in developing countries is dependent on overcoming several obstacles or country characteristics, such as weak institutions, poor infrastructure, disadvantageous geography and inadequate economic policies. Consequently, Rodrik (2014) concludes that developing countries converge to rich country income levels conditional on these problems being overcome. An ongoing debate is whether improvements in growth fundamentals can be expected to improve economic stability. Multiple studies have shown the relationship between good policy and economic growth is not particularly strong, though Acemoglu, Gallego, and Robinson (2014) suggest that differences in institution quality account for 75% of the variation in income levels around the world. This latter work points to a long run effect in levels, rather than an insight into short- or medium- term growth rates. 2

It is now well-established that the modern organized manufacturing sector exhibits unconditional convergence, contrary to other economic sectors (Rodrik 2014); that is, manufacturing industries converge to the global productivity frontier regardless of the condition of growth fundamentals. The question is whether Africa can generate a growth miracle based on the manufacturing industry. In a model that incorporates this unconditional convergence, structural change the shift of labor from low productivity industries to high productivity industries- plays an essential role. The level of employment shares across sectors in developing countries conditional on income level shows that African countries fit into a global pattern: shares of employment in the different sectors are what one would expect them to be. So just like elsewhere, structural change in sub-saharan Africa has been through a decline in the share of labor employment in agriculture, the least productive sector in sub- Saharan economies. Unlike other developing countries, African countries (generally) have not seen a significant increase in the share of labor force employment in manufacturing instead, the shift in employment share has been towards the services sector. Thus African structural change is unlike the pattern exhibited by Asian and European industrializers: labor is currently largely shifting towards the services industry, which historically has been less productive than manufacturing in other countries. Additionally, the manufacturing sector is dominated by informal firms, which are less productive than the formal organized firms required for unconditional convergence. Rodrik (2014) notes that African countries are de-industrializing much faster than Asian and European countries did in the past. African countries thus need to assess what type of growth model is both suitable and feasible. 1 1 Other literature has investigated the consumption side of African growth in recent decades. Using the Demographic and Health Survey (DHS) data, Young (2012) shows that since 1990, real material consumption in Sub-Saharan Africa has been rising at a rate of 3.4 to 3.7 percent per year. This is 3 to 4 times higher than the number usually reported by international data sources like the Penn World Tables (PWT) and the UN:.9-1.1 percent. Non-African developing countries in the DHS sample exhibit a growth rate of 3.8 percent. When the data are examined by product group, Young (2012) finds greater Sub-Saharan growth in durable goods (5.6 percent) but lower growth in housing (1.8 percent). Although various sources claim Sub-Saharan Africa is growing at less than half the pace of other developing countries, DHS data suggest African growth is easily comparable to that of other economies. McMillan and Harttgen (2014) explore the reason behind the African growth and fill in some of the explanatory gaps in Young (2012). The African miracle can be traced to a decline in the share of the labor force that engages in agriculture. The paper links improvements in living standards found by Young (2012) to sectoral changes: between 2000 and 2010 the share of the labor force employed in agriculture in sub-saharan Africa declined by approximately 10 percentage points. With this came a 2-percentage point increase in manufacturing employment and 8-percentage point increase in services. Between 2000 and 2010, structural change contributed 1 percentage point to labor productivity growth. Essentially the shift of employment from agriculture to more productive sectors explains some of the growth in real consumption documented by Young (2012). 3

A Historical Lens Using a recently available data set from the Groeningen Growth and Development Centre s 10-sector database (hereafter GGDC data ) that provides employment and value added for ten disaggregated product sectors for a large set of countries historically, we begin the paper with high-level analyses investigating cross-country trends in sectoral productivity convergence and how the relationship between levels of development and economic structure has changed over time. The GGDC data provides a long-run, internationally comparable dataset on sectoral productivity performance in Africa, Asia, and Latin America. Variables covered in the data set are annual series of value added, output deflators, and persons employed for 10 broad sectors (Timmer, de Vries and de Vries 2014). These ten sectors comprise agriculture, mining, utilities, construction, manufacturing, wholesale and retail trade, FIRE industries, transport, government services, and other services (restaurants, hospitality, etc.). Among Sub-Saharan African countries, it contains data from Ethiopia, Botswana, Ghana, Kenya, Malawi, Mauritius, Nigeria, Senegal, South Africa, Tanzania and Zambia. These data allow a more nuanced look at the role of specific sectors in structural change, particularly separating construction and mining from manufacturing aggregates, and FIRE industries, government services, transport, and utilities from services aggregates, allowing greater specificity in understanding which sectors are drivers of structural change. Many of the countries in the recent release have reliable data going back to the 1970s or earlier, so we are able to build a long historical quantitative view of structural change. This, in turn, allows us to place economies current and recent trends in comparative historical context. Changing Relationship between Income and Economic Structure Figures 1 and 2 use the GGDC data to investigate the cross-sectional relationship between country income levels and economic structure (as embodied by the share of employment in the focal sector). As can be seen clearly, there is a clear trend in the changing nature of the relationship between productivity levels and economic structure for both manufacturing and the largest services subsector, wholesale & retail trade. At the beginning of the study period in the early 1970s, the relationship between the manufacturing labor share and income was far steeper than it is today, having followed a progressive erosion of the initial strength of this correlation over the past four decades. 4

Figure 1: The changing relationship between economic structure and income: manufacturing Figure 2: The changing relationship between economic structure and income: traditional services 5

Over the same period, traditional services industries have increased their employment share across all income levels. In contrast to manufacturing, the relationship between income level and employment in the sector has not shown a distinct trend in changes in its slope over time. Figures 3 and 4 use sectoral productivity figures to investigate trends in unconditional convergence across countries over the past four decades. Although these data are available only for a subsample of economies, we find several trends: while convergence in manufacturing was a clear and strong trend some decades ago, it may no longer be as strong in recent decades, recent trends in convergence suggest that (traditional) services show more evidence of convergent pressures than manufacturing, modern services (particularly FIRE industries), but also the catch-all of other services (including primarily traditional hospitality/restaurants industries), show stronger convergence in recent decades than traditional trade services. 6

Figure 3: Patterns of convergence across decades, manufacturing and wholesale/retail trade This analysis suggests that if countries wish to benefit from growth convergence in the present day, the opportunity to do so likely exists more among service sectors, whereas in the past this opportunity was 7

found in the manufacturing sector. Figure 3 shows how these convergent pressures are even stronger in other sectors of services, including the FIRE industries and other services such as hospitality and tourism. Figure 4: Patterns of convergence across decades, FIRE industries and Other services, 1970 to 2010 African economies do not appear to be following the experience of East Asian countries in their historical patterns of structural change. Most obviously, East Asian countries have shown consistently higher 8

productivity growth than would be predicted by global growth convergence trends. This is not broadly the case for African countries in any time period or sector, with within-sector productivity growth across sectors showing no pattern of countries either consistently outperforming or underperforming predicted levels of convergence. The next section investigates trends in changes in economic structure for African countries in recent decades to understand whether their growth patterns have benefitted from convergent pressures in manufacturing in past decades, or in services in more recent decades, or neither. Appendix B contains further comparisons of African sectoral convergence to other countries for which the data are available. Structural Change in African Economies Using the same GGDC data, we adopt the framework of McMillan and Rodrik (2012) to show the pace, intensity, and consistency of structural change in African countries over four decades dating back to the 1970s. These analyses plot, for a given time period, the sector-level change in aggregate labor share on the horizontal axis with the within-country, relative productivity level of the sector on the vertical axis. These graphics show visually the pattern of structural change for each decade for the countries for which data are available. We are thus able to assess and characterize historical structural change on three dimensions: pace (given by the relative length of the fitted line), intensity (given by the slope of the fitted line), and consistency (comparing pace and intensity across decades). These analyses identify two broad growth patterns among African countries for which there are data: Pattern 1 Early transition of labor out of agriculture Pace of structural change slows in the 1990s/2000s Wholesale & retail trade is not the main labor absorbing sector in the 2000s Countries: Botswana, Nigeria, South Africa, Mauritius, the Arab Republic of Egypt Pattern 2 Late transition of labor out of agriculture, if at all Pace of structural change doesn t slow markedly in 1990s/2000s Wholesale & retail trade is the main sector absorbing labor in the 2000s Countries: Zambia, Tanzania, Ethiopia, Senegal, Malawi, Ghana, Kenya As an example, Figure 5 shows the historical patterns of structural change in a country following each pattern: Botswana (pattern 1) and Ethiopia (pattern 2). Pattern I Early Reformers 9

The first categorization of Pattern I countries largely refers to the timing of the transition of labor out of agriculture. Pattern I countries had an early shift of labor out of the agriculture sector 1970s/1980s. The pace of structural change in Pattern I countries slows down in the 1990s and 2000s. The faster the structural change, the faster the decline in the share of agriculture in the overall labor force. The intensity of structural change, given by the slope of the line, fluctuates by decade. While there is no straightforward pattern, in the 1990s the intensity declines for all countries in this group. 10

Figure 5: Pattern 1 and 2 economies Economic transformation is historically associated with an exodus of labor out of the agriculture sector into more productive sectors, which has typically meant manufacturing in the past. This analysis shows 11

this is not what is happening in many African countries. Most countries have seen rapid labor migration out of agriculture into more traditional services sector. The Pattern I countries exhibit a shift of labor towards a mixture of sectors, one of which is the wholesale & retail trade sector, although this sector is not the main sectoral destination for labor in the latter period of the 2000s for Pattern 1 economies. Figure 6 Once stuctural change begins, its consistency in subsequent decades does not necessarily follow. Nigeria exhibits a shift out of agriculture labor early in the 1970s, but by the 1990s, agriculture re-aborbs a share of labor of a similar magnitude. Overall, the countries show growth-enhancing structural change, where there is a positive correlation between the direction of labor shifts and sectoral productivity, with minor changes in pace and intensity. 12

Figure 7 South Africa s intensity of change decreases in the most recent two decades, with betas of 9.25 and 11.3 for the 1990s and 2000s, respectively. In the 1970s and 1980s, the intensity was an average of 22.5. Botswana s intensity decreases in the latter decades as well, with a simultaneous slowdown in pace. Nigeria swings upward and downward in intensity over the course of four decades. 13

Figure 8 We incorporated WDI indicators for international trade and the pace of urbanization as well as a measure of conflict intensity from the Uppsala Conflict Data Program. The Pattern I countries either consistently have low trade and urbanization levels throughout the four decades we observe, or they display declines. The one exception to this trend is Botswana, which experienced increases in urbanization growth rates in the 1990s and 2000s. Conflict intensity consistenly declines in all countries for which we have data. In unreported econometric estimates, however, multiple correlations between these indicators and measures of the pace and intensity of decadal structural change are not statistically meaningful. Pattern II Late Reformers Pattern II consists of countries that had a late shift of labor out of the agricultural sector, if at all, including Zambia, Tanzania, Ethiopia, Senegal, Malawi, Ghana, and Kenya. The pace of structural change among this set of countries does not slow down in the 1990s and 2000s, although over time its intensity fluctuates substantially. For example, Kenya s intensity of structural change decreases consistently from the 1970s to the 2000s, which can be seen clearly in Figure 9. Zambia, on the other hand, exhibits a drastic increase in structural change intensity in the 2000s. 14

Figure 9 The wholesale retail & trade sector is highly absorbent of labor in these countries with varying levels of productivity. Ghana, Kenya, and Senegal exhibit low productivity in the retaile trade sector, while Tanzania, Ethiopia, Malawi, and Zambia have a relatively productive trade sector in the 2000s. Consistency Senegal and Malawi show strong growth-enhancing structural change consistently over the most recent two decades, particularly. Like several other countries, the sector experiencing the largest employment gain in recent decades is wholesale retail & trade. Figure 10 15

Zambia displays negative structural change in the 1980s and 1990s, with high shares of labor going into agriculture as a consequence of policies surrounding import liberalization. With time, the employment Figure 11 adjusts and starts to shift away from low-productivity sectors like agriculture. The consistency and trend of structural change is interrupted by specific country policies and governance. Trade, urbanization and conflict follow the same trend as the countries in Pattern I did. Trade and urbanization decline throughout the four decades for six of the countries, the exception being Ghana, while conflict intensity declines in the 1990s and 2000s in all but Senegal. What is striking in the graphs described is the predominance of the wholesale retail & trade sector. While the WRT sector is not the main absorber of labor after 2000 for Pattern I countries, it is still one of the largest sectors. A majority of jobs are being provided by the traditional services industry across the African countries, implying that globalization and local circumstances or policies have pushed structural change in this direction. 16

Furthermore, the countries grouped in Pattern II are broken down into two separate categories: a. Countries with low productivity wholesale & retail trade sector (Kenya, Ghana, Senegal) b. Countries with high productivity wholesale & retail trade sector (Tanzania, Zambia, Ethiopia, Malawi) Figure 12 Looking ahead: Which non-african countries fit similar patterns? We look to see which other countries have historical patterns of structural change that are similar to those of the two groups of African countries. Only a few economies seem to fit the criteria of patterns 1 & 2 defined above. Those of pattern 1 the early movers out of agriculture, which saw a relative slowdown in the pace of change in recent decades, include Mexico and Taiwan, China, as seen below in Figure 13. Figure 13 There are also two countries that fit pattern 2 well, with later transitions out of agriculture and transitional trade services absorbing much of this labor. These include Thailand and India, seen in Figure 14. 17

Figure 14 These analyses suggest similarities between the two groups of African economies with at least some recent experiences with structural change in other well-performing economies. Structural Transformation Scorecard What kind of structural transformation contributes most to rapid and sustained growth? We examine this question using a scorecard approach to assess the impact of structural transformation in Africa. We use five criteria to give a scorecard (see Amirapu and Subramanian, 2015): 1) high productivity, 2) dynamic productivity growth via reallocation into a sector with domestic and international convergence, 3) expansion of the sector in its use of inputs, 4) comparative advantage via resource requirements of the sector and resource endowments of the country, and 5) exportability. A detailed country level score card on structural transformation can be seen in Appendix C. Our analysis points to two sectors among African economies that share at least some of these characteristics. The first is wholesale and retail trade services, which has high productivity and many countries are already experiencing as a destination for excess labor being shed from agriculture, although it lacks some aspects of tradability. Another sector, having high productivity and convergent pressures, but which African countries are not yet seeing absorb much labor, is the construction sector. Both sectors, however, suffer from a lack of tradability and exportability. Modern services, such as those in the FIRE industries, are both tradeable and exportable, although the share of these industries is still quite small in many African countries and has yet to be seen absorbing any substantial share of labor. In contrast to the experience of India, which has seen an expansion of both modern services and construction sectors, most African countries have yet to capitalize on these waiting sectors as potential drivers of structural change. 18

So as to allow for individual-country analysis to provide more nuanced conclusions than the above, in the Annex C we provide summary indicators by country underlying these major patterns of structural change, including a few additional countries for comparison (Brazil, China, India, and Mexico). This allows the ability to compare changes in employment shares, output growth rates, and labor productivity across sectors for a particular focal economy. For example, South Africa does not particularly follow the above trends; while the country has absorbed a substantial amount of labor into wholesale and retail trade, construction has not done so; instead, there were greater shifts into higher productivity sectors (FIRE industries and the public sector). We provide this rubric mainly in order to allow for additional nuance to be available for country-by-country assessment of the broad patterns described above. Conclusion We present a country-by-country historical analysis of structural change in Africa over the past four decades. Given the varied patterns and trends in structural change across African countries, we find it difficult to speak of structural change from a single, continent-wide perspective. We do, however, find two general patterns of structural change. First, the early reformers saw an early transition of labor out of agriculture, with manufacturing absorbing this labor in decades prior to the 1990s. Second, the later reformers, saw a later transition out of agriculture, where labor being shed from agriculture in the 1990s and 2000s appears to largely have been absorbed in the services sector. 19

References Acemoglu, Daron, Francisco A. Gallego and James A. Robinson. 2014. Institutions, Human Capital and Development. Annual Reviews of Economics 6: 875-912. ACET. 2014. 2014 African Transformation Report: Growth with Depth. Available at: http://africantransformation.org/wp-content/uploads/2014/02/2014-african-transformation-report.pdf, accessed June 26, 2015. ADB. 2015. AfDB Group's Long Term Strategy. Available at: http://www.afdb.org/en/consultations/closedconsultations/afdb-groups-long-term-strategy/, accessed June 26, 2015. Amirapu, Amrit and Arvind Subramanian. 2015. Manufacturing or Services? An Indian Illustration of a Development Dilemma. CGD Working Paper 409. AU. 2015. Agenda 2063 Vision and Priorities. Available at: http://agenda2063.au.int/en/vision, accessed June 26, 2015. Fine, and Susan Lund. 2012. Jobs: The next piece of Africa s growth jigsaw. VoxEU.org, available at: http://voxeu.org/article/jobs-next-piece-africa-s-growth-jigsaw. Accessed 12 April 2016. IMF. 2013. Jobs and Growth: Analytical and Operational Considerations for the Fund. Available at: https://www.imf.org/external/np/pp/eng/2013/031413.pdf, accessed June 26, 2015. McKinsey Global Institute. 2010. Lions on the Move The Progress and Potential of African Economies. Available at: http://www.mckinsey.com/global-themes/middle-east-and-africa/lions-on-the-move. Accessed: 25 April 2016. McMillan, Margaret S, and Kenneth Harttgen. 2014. What is driving the African Growth Miracle? National Bureau of Economic Research (NBER) Working Paper No. 20077. McMillian, Margaret and Dani Rodrik. 2014. Globalization, Structural Change, and Growth, with an Update on Africa. World Development Vol. 63, pp. 11-32. Rodrik, Dani. 2014. An African Growth Miracle? National Bureau of Economic Research (NBER) Working Paper No. 20188. Timmer, M.P., G.J. de Vries, and K. de Vries (2014). Patterns of Structural Change in Developing Countries, GGDC research memorandum 149. UNCTAD. 2012. Economic Development in Africa: Structural Transformation and Sustainable Development in Africa. Available at: http://unctad.org/en/publicationslibrary/aldcafrica2012_embargo_en.pdf, accessed June 26, 2015. UNECA. 2013. Economic Report on Africa 2013. Available at: http://www.uneca.org/publications/economicreport-africa-2013, accessed June 26, 2015. World Bank, 2014, Africa s Pulse: Decades of Sustained Growth is Transforming Africa s Economies. World Bank. Washington, DC. Available at: http://www.worldbank.org/en/region/afr/publication/africas-pulsedecades-of-sustained-growth-is-transforming-africas-economies. Accessed 25 April 2016. Young, Alwyn. 2012. The African growth miracle, Journal of Political Economy 120(4): 696-739. 20

21

Appendix A: Variables used & definitions WDI variables: Indicator Name Definition Original source Trade (% of GDP) Trade is the sum of exports and imports of goods and services measured as a share of World Bank national accounts data, and OECD National gross domestic product. Variable gives average decadal value per country. Accounts data files. Urbanization Average growth rate of urban population/total population by decade for each Fraction of the orginal variables in grey below. country. Conflict Average conflict intensity level by decade for each country. Intensity level is categorized into:no conflict, minor conflict or war. UCDP/PRIO Armed Conflict Dataset v.4 2014a, 1946 2013 Urban population Population, total Urban population refers to people living in urban areas as defined by national World Bank Staff estimates based on United Nations, statistical offices. It is calculated using World Bank population estimates and urban World Urbanization Prospects. ratios from the United Nations World Urbanization Prospects. Aggregation of urban and rural population may not add up to total population because of different country coverages. Total population is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of their country of origin. The values shown are midyear estimates. (1) United Nations Population Division. World Population Prospects, (2) United Nations Statistical Division. Population and Vital Statistics Report (various years), (3) Census reports and other statistical publications from national statistical offices, (4) Eurostat: Demographic Statistics, (5) Secretariat of the Pacific Community: Statistics and Demography Programme, and (6) U.S. Census Bureau: International Database. Indicator definitions: Definitions for relative levels of country indicators of trade, urbanization, conflict Decade 1970s 1980s 1990s 2000s Years: Representation Low 1970 1979 Med High Low 1980 1989 Med High Low 1990 1999 Med High Low 2000 2009 Med High Trade (average level, in share of GDP) 10.9 44.3 44.8 84.2 84.4 294.6 13.5 50.1 50.6 91.6 93.2 346.2 2.9 56.8 57.4 87.2 87.7 326.7 0.6 68.27 68.36 94.82 95.82 389.55 Urbanization (change in urbanization rate) 0.03 0.31 0.32 0.56 0.57 1 0.05 0.34 0.35 0.64 0.65 1 0.07 0.39 0.4 0.68 0.69 1 0.09 0.43 0.44 0.68 0.69 1 Conflict (average level) 0 0 0.33 0.44 0.5 1.79 0 0 0.33 0.5 0.54 2 0 0 0.33 0.67 0.74 2 0 0 0.33 0.59 0.67 1.64 Note: Each definition above provides the ranges of the observation values assigned to each category. Cutoffs based on terciles, except for conflict, where "low" is no conflict (no minor or major conflict for one country during that decade. 22

Appendix B: Supplementary Exhibits 23

24

25

26

27

28

29

Annex Data Sources Africa Sector Database (ASD)- University of Groningen World Development Indicators (WDI) - The World Bank Table of Contents I. Scorecard II. Convergence III. Peak growth Annex: Page 1

Part I. Scorecard Africa Sector Database Sector Description Agriculture Mining Manufacturing Utilities Construction Trade services Transport services Business services Government services Personal services Aggregate services Agriculture, Hunting and Forestry, Fishing Mining and Quarrying Manufacturing Electricity, Gas and Water supply Construction Wholesale and Retail trade; repair of motor vehicles, motorcycles and personal and household goods, Hotels and Restaurants Transport, Storage and Communications Financial Intermediation, Real Estate, Renting and Business Activities Public Administration and Defense, Education, Health and Social work Other Community, Social and Personal service activities, Activities of Private Households Trade services & Transport services & Business services Key : Gross value added at constant local prices (millions), 1970. Value added in constant prices is calculated from estimated series of nominal data and price deflators, and rebased to express values in 2005 prices. : The ratio of persons employed in sector to total persons employed, 1970. is defined as all persons engaged, aged 15 : The ratio of output to number of persons engaged in sector, 1970. Aggregate Services: Wholesale and Retail trade; repair of motor vehicles, motorcycles and personal and household goods, Hotels and Restaurants; Change (1970s-2000s) Average employment share in the 2000s minus average employment share in 1970s. Growth (1970s to 2000s) (Average employment share in the 2000s - average employment share in 1970s) / average employment share in the 1970s Annex: Page 2

Africa Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 21068 2.90% 5.76% 70.30% -11.35% -5.84% 0.51 0.71% 3.76% Mining 34819 1.63% 1.40% 1.38% -0.72% -0.05% 42.86 0.89% -0.76% Manufacturing 21462 2.88% 3.22% 6.13% 0.50% 1.24% 5.94 0.06% -1.74% Utilities 1943 4.45% 3.18% 0.22% 0.05% 0.01% 15.00 1.28% 0.06% Construction 14759 3.03% 8.79% 1.64% 0.93% 0.96% 15.24-0.72% 0.88% Trade services 20760 3.87% 6.67% 9.66% 5.37% 1.92% 3.64 0.11% 2.26% Transport services 7120 4.70% 6.82% 1.60% 0.95% 0.46% 7.52 0.85% 1.76% Business services 13474 6.45% 7.86% 0.57% 1.85% 1.02% 39.75 0.07% -0.74% Government services 28718 3.65% 4.20% 3.78% 1.96% 0.40% 12.87-0.04% 0.53% Personal services 8252 4.18% 4.91% 4.71% 0.46% -0.12% 2.97 1.29% 2.19% Aggregate Services 78323 4.56% 6.19% 20.34% 10.60% 3.68% 6.53 0.83% 1.90% *Includes Botswana, Ethiopia, Ghana, Kenya, Malawi, Mauritius, Nigeria, Senegal, Zambia, Tanzania, South Africa Annex: Page 3

Botswana Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 474 2.91% 4.93% 81.20% -43.11% -0.22% 2.99 1.70% 3.83% Mining 481 7.83% -2.30% 1.84% 0.13% -0.48% 134.17 4.38% -1.26% Manufacturing 90 10.10% 4.42% 1.47% 5.01% 0.05% 31.42 2.88% 3.18% Utilities 19 9.40% 0.57% 0.25% 0.34% -0.13% 38.01 3.86% 1.51% Construction 615 4.90% 5.27% 2.24% 0.46% -6.46% 140.42 1.25% 17.63% Trade services 381 8.73% 7.98% 1.36% 17.92% 8.57% 143.83-1.33% 0.69% Transport services 40 11.56% 6.51% 1.05% 2.09% 0.70% 19.36 5.26% 2.72% Business services 41 13.37% 4.85% 1.12% 5.88% 2.16% 18.76 5.00% -0.07% Government services 290 8.62% 3.27% 4.91% 11.92% -2.94% 30.24 2.14% 3.78% Personal services 49 11.83% 9.47% 4.56% -0.64% -1.23% 5.50 8.85% 11.25% Aggregate Services 801 9.69% 6.03% 13.00% 37.16% 7.25% 31.54 2.84% 3.23% Annex: Page 4

Egypt Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 20092 3.83% 3.21% 53.92% -31.34% -6.01% 4.53 3.15% 1.68% Mining 13489 4.96% 5.74% 0.23% -0.13% -0.13% 706.05 4.22% 10.38% Manufacturing 16434 5.00% 4.09% 14.18% -3.08% -0.09% 14.10 2.70% 0.24% Utilities 801 6.65% 5.06% 0.62% 0.67% -0.03% 15.68 1.79% 1.35% Construction 1018 9.69% 7.77% 2.84% 9.83% 2.81% 4.36 2.72% 1.13% Trade services 9488 6.23% 6.61% 7.60% 6.20% 2.78% 15.19 1.74% 0.29% Transport services 2152 10.09% 10.89% 2.33% 6.93% 3.71% 11.24 3.39% 1.39% Business services 2245 8.32% 2.04% 0.89% 2.27% -0.74% 30.83 2.02% 0.28% Government services 4153 6.97% 3.48% 17.40% 8.65% -2.29% 2.90 2.95% 0.41% Personal services 1835 7.16% 9.38% Aggregate Services 19872 7.45% 6.24% 28.21% 24.04% 3.45% 8.57 2.86% 1.53% Annex: Page 5

Mauritius Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 2179 3.86% 0.32% 37.30% -30.14% -4.27% 30.47 5.56% 3.94% Mining 506 0.83% -10.84% 0.07% 0.11% -0.11% 3629.01-3.92% -7.76% Manufacturing 2911 6.49% 1.56% 10.61% 8.49% -9.68% 143.09 2.34% 4.61% Utilities 288 6.60% 3.54% 1.64% -0.62% 0.20% 91.65 5.19% 0.15% Construction 1325 6.02% 6.34% 7.80% 2.17% 0.62% 88.61 2.77% 4.47% Trade services 3785 5.99% 4.05% 7.70% 13.80% 3.86% 256.42 0.75% 0.86% Transport services 1655 7.52% 7.43% 5.81% 2.46% 1.60% 148.61 3.94% 3.96% Business services 889 8.39% 4.61% 1.12% 8.43% 4.94% 413.88 0.20% -3.84% Government services 2756 5.97% 4.29% 12.08% 4.40% 2.04% 118.97 2.55% 1.76% Personal services 378 8.03% 7.16% 15.85% -9.10% 0.79% 12.43 7.63% 4.64% Aggregate Services 9462 6.72% 5.10% 42.57% 19.98% 13.23% 115.97 3.08% 1.47% Annex: Page 6

Nigeria Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 1577584 3.74% 10.40% 64.78% -4.12% -3.03% 108.41 1.74% 7.96% Mining 2123349 2.36% 1.52% 0.15% 0.09% 0.16% 64908.85-0.93% -12.21% Manufacturing 74946 5.52% 8.74% 7.01% -2.83% 1.08% 47.57 4.67% 2.71% Utilities 2439 6.10% 8.59% 0.15% 0.08% -0.05% 74.08 2.79% 7.80% Construction 78951 4.09% 9.16% 1.00% 0.61% 0.91% 350.86 0.73% -2.24% Trade services 469020 5.27% 13.01% 15.32% 1.60% -1.96% 136.32 2.83% 11.18% Transport services 24463 7.00% 18.95% 1.32% 1.73% 0.89% 82.66 2.61% 11.84% Business services 17434 8.19% 10.92% 0.26% 2.49% 2.12% 298.54-0.14% -6.88% Government services 22701 5.65% 6.26% 4.71% -0.39% 0.11% 21.48 3.68% 3.14% Personal services 19795 6.16% 9.88% 5.31% 0.75% -0.23% 16.60 3.60% 7.32% Aggregate Services 553414 5.58% 12.60% 26.91% 6.19% 0.93% 91.56 2.85% 9.26% Annex: Page 7

South Africa Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 18017 2.12% 1.84% 34.72% -19.69% -3.63% 6.76 2.62% 3.14% Mining 121105-0.50% 0.01% 8.80% -6.72% -1.40% 179.11 1.50% 4.34% Manufacturing 103906 2.53% 2.40% 13.33% -1.43% -1.73% 101.50 1.18% 2.87% Utilities 7254 3.96% 1.84% 0.65% -0.03% 0.07% 145.99 2.43% -0.24% Construction 24658 2.15% 8.14% 5.81% 1.44% 2.22% 55.24-0.03% 3.33% Trade services 71358 2.91% 3.35% 13.49% 6.53% -0.71% 68.86 0.27% 2.79% Transport services 31811 4.24% 4.99% 4.40% 0.89% -0.05% 94.03 2.10% 4.15% Business services 27728 5.92% 8.65% 2.48% 8.85% 3.76% 145.65 0.35% 3.44% Government services 91066 2.54% 2.66% 5.80% 9.67% 0.86% 204.46-1.54% 1.17% Personal services 23932 3.64% 3.16% 10.52% 0.48% 0.61% 29.61 1.87% 1.66% Aggregate Services 245895 3.62% 4.59% 36.69% 26.43% 4.47% 87.24 0.59% 2.90% Annex: Page 8

Ethiopia Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 28188 2.15% 6.68% 92.49% -17.34% -9.77% 2.63-0.39% 4.35% Mining 87 5.92% 8.69% 0.01% 0.46% 0.22% 61.83-6.22% -1.45% Manufacturing 1233 4.80% 7.42% 1.87% 4.37% 3.10% 5.68-1.35% -3.10% Utilities 365 5.28% 6.66% 0.04% 0.06% 0.02% 70.38 0.08% 0.70% Construction 1666 4.27% 11.98% 0.30% 1.72% 1.50% 48.58-3.59% -5.59% Trade services 4443 4.82% 10.92% 2.63% 7.58% 5.47% 14.57-1.71% -0.75% Transport services 724 6.45% 10.77% 0.34% 0.17% 0.14% 18.55 2.20% 3.49% Business services 333 8.72% 12.20% 0.11% 0.33% 0.29% 25.25 1.96% -2.72% Government services 677 8.42% 7.33% 1.12% 1.37% -0.73% 5.22 3.09% 6.41% Personal services 438 5.97% 6.51% 1.08% 1.28% -0.25% 3.50 0.80% 3.97% Aggregate Services 6615 6.04% 9.71% 5.28% 10.73% 4.93% 10.81 0.05% 2.18% Annex: Page 9

Ghana Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 1896 2.88% 4.80% 57.04% -15.48% -12.07% 1.06 0.67% 4.10% Mining 275 1.92% 6.36% 0.99% 0.11% -0.68% 8.86-1.32% 8.05% Manufacturing 954 1.54% 3.54% 12.08% -1.28% 0.20% 2.52-1.14% 0.08% Utilities 34 6.33% 6.71% 0.39% 0.00% 0.05% 2.73 3.22% 2.01% Construction 500 3.15% 11.01% 2.40% 0.66% 0.13% 6.65-0.47% 7.04% Trade services 565 3.59% 6.28% 13.83% 10.50% 7.31% 1.30-0.84% -0.69% Transport services 423 5.29% 6.72% 2.72% 0.82% 0.64% 4.95 1.55% 1.29% Business services 62 7.62% 6.07% 0.30% 2.01% 0.87% 6.64-0.72% -2.02% Government services 281 5.03% 6.60% 7.02% -0.43% 1.38% 1.28 2.12% 0.83% Personal services 69 6.45% 6.37% 3.22% 3.09% 2.17% 0.69 1.62% -1.26% Aggregate Services 1401 4.95% 6.48% 27.10% 15.99% 12.38% 1.65 0.71% -0.33% Annex: Page 10

Kenya Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 151567 2.22% 2.27% 81.02% -32.71% -7.76% 48.12 0.06% 0.95% Mining 2493 3.15% 4.08% 0.12% 0.48% 0.12% 522.15-4.23% -0.96% Manufacturing 28002 4.83% 3.85% 3.79% 8.97% 2.72% 190.04-1.73% -1.40% Utilities 6668 4.19% 5.96% 0.13% 0.06% -0.08% 1331.56-0.31% 6.60% Construction 34533 2.17% 5.32% 0.85% 1.98% 0.50% 1047.55-4.19% 0.47% Trade services 42644 4.13% 5.66% 5.04% 11.39% 4.17% 217.80-2.30% -0.22% Transport services 33723 4.76% 8.36% 1.39% 2.04% -0.20% 623.82-1.02% 5.98% Business services 13652 5.67% 3.76% 0.85% 0.36% -0.43% 412.49 1.20% 4.00% Government services 50914 3.84% 2.09% 3.41% 2.65% -0.44% 384.27-1.09% -0.02% Personal services 33342 1.83% 2.82% 3.41% 4.77% 1.40% 251.66-3.73% -1.86% Aggregate Services 174276 4.05% 4.58% 14.09% 21.21% 4.50% 318.06-1.73% 0.33% Annex: Page 11

Malawi Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 29081 3.79% 2.37% 86.71% -21.52% -17.16% 19.33 1.37% 1.57% Mining 1024 6.63% 20.21% 0.20% -0.08% 0.08% 288.90 4.70% 6.12% Manufacturing 9569 3.94% 5.90% 3.06% 1.37% 1.76% 180.01-0.13% -2.40% Utilities 761 6.18% 6.51% 0.22% 0.11% 0.14% 202.13 1.94% -2.44% Construction 5306 3.73% 7.57% 2.04% 2.50% 2.62% 150.06-1.40% -4.34% Trade services 15734 4.20% 6.79% 1.94% 11.05% 7.01% 467.29-3.64% -4.21% Transport services 5063 5.32% 9.80% 0.92% 1.32% 1.46% 316.40-0.11% -4.25% Business services 1567 8.15% 6.18% 0.15% 0.58% 0.03% 615.88 0.76% 2.45% Government services 12407 2.57% 1.20% 2.84% 4.35% 2.74% 251.49-2.81% -6.51% Personal services 5453 3.32% 5.92% 1.91% 0.34% 1.33% 164.20-0.22% -6.06% Aggregate Services 40223 4.25% 5.90% 7.77% 17.63% 12.56% 298.48-1.86% -4.12% Annex: Page 12

Senegal Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 425597 1.62% 2.44% 73.28% -21.84% -6.79% 580.09-1.17% 0.70% Mining 24185 2.28% 3.20% 0.21% 0.02% 0.10% 11521.81-1.59% -5.27% Manufacturing 215146 2.88% 2.87% 5.64% 4.26% 1.92% 3811.96-2.21% -2.26% Utilities 28707 3.74% 5.78% 0.34% -0.30% -0.14% 8482.16 5.32% 19.08% Construction 21889 6.16% 6.09% 1.26% 2.52% 0.99% 1737.82-0.44% -0.06% Trade services 335498 2.57% 2.72% 7.28% 13.79% 2.73% 4602.70-3.72% -1.65% Transport services 117466 4.51% 11.04% 1.81% 1.61% 1.42% 6492.47-0.85% 2.17% Business services 29574 6.58% 5.74% 0.19% 0.32% 0.14% 15164.78 0.28% -0.70% Government services 239728 2.32% 3.48% 5.02% 0.15% 0.33% 4770.17-1.44% -0.20% Personal services 31775 2.89% 3.01% 4.97% -0.54% -0.70% 638.44-0.53% 1.48% Aggregate Services 754039 3.23% 4.92% 19.27% 15.34% 3.93% 3907.77-1.93% 0.63% Annex: Page 13

Tanzania Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 1417787 3.50% 4.28% 91.37% -19.71% -11.83% 266.81 1.04% 2.12% Mining 57261 6.15% 11.10% 0.10% 0.69% 0.28% 10213.32-2.26% 2.48% Manufacturing 453045 3.67% 8.34% 1.72% 1.52% 1.57% 4533.29-0.99% -2.18% Utilities 46709 5.94% 6.56% 0.10% 0.35% 0.21% 7956.53-0.98% -3.51% Construction 391440 4.11% 10.33% 0.62% 0.76% 0.56% 10855.47-0.98% 0.98% Trade services 763105 3.65% 7.57% 1.95% 7.83% 3.02% 6734.89-3.40% -0.01% Transport services 329456 4.02% 8.90% 0.88% 1.03% 1.15% 6408.17-0.99% -4.17% Business services 133624 4.83% 7.07% 0.14% 0.52% 0.46% 16688.35-2.19% -8.28% Government services 326410 5.13% 8.01% 1.96% 6.28% 4.74% 2863.62-1.59% -4.37% Personal services 18060 4.99% 2.94% 1.16% 0.73% -0.15% 267.48 0.64% 0.06% Aggregate Services 1570654 4.22% 7.79% 6.09% 16.39% 9.21% 4434.02-2.12% -1.38% Annex: Page 14

Zambia Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 1969293 2.34% -1.58% 62.72% 9.52% 0.64% 2402.99-0.66% -4.40% Mining 3661718 1.70% 20.30% 3.93% -1.48% 1.15% 71373.69 0.24% 9.75% Manufacturing 1577762 2.71% 5.16% 3.05% 0.26% 0.55% 39588.84-0.16% 0.38% Utilities 145334 4.85% 1.98% 0.59% -0.33% -0.13% 18784.37 4.21% 3.10% Construction 2426012 1.15% 11.66% 3.92% -2.48% 0.13% 47376.93 1.03% 7.52% Trade services 1316145 5.62% 7.17% 4.05% 6.50% 3.78% 24849.94 0.45% -0.34% Transport services 603188 6.33% 17.01% 2.67% -0.69% 0.08% 17260.23 4.35% 13.31% Business services 221779 7.90% 5.73% 1.35% -0.25% 0.07% 12577.22 5.64% 2.15% Government services 929371 5.38% 12.03% Personal services 109964 4.18% 11.83% 17.71% -11.06% -6.27% 475.27 4.00% 16.19% Aggregate Services 3180447 5.90% 9.60% 25.79% -5.50% -2.35% 9439.86 3.78% 7.72% Annex: Page 15

Morocco Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 35467 2.64% 7.30% 55.23% -20.24% 7.89% 21.04 0.43% -0.57% Mining 3975 2.31% 3.68% 1.74% -1.44% -0.35% 74.89 3.43% 6.47% Manufacturing 20179 3.78% 2.64% 11.37% 1.16% -4.64% 58.13 0.14% 0.70% Utilities 1758 6.18% 6.37% 0.32% 0.05% -0.18% 180.90 2.32% 5.16% Construction 9383 3.96% 6.70% 4.57% 6.40% 0.92% 67.32-1.61% 0.55% Trade services 18755 3.72% 3.33% 9.15% 7.27% -1.36% 67.18-1.13% -0.99% Transport services 3633 6.60% 7.64% 3.36% 0.65% -0.49% 35.44 2.66% 3.52% Business services 9987 6.17% 5.39% 0.64% 1.16% 0.24% 509.77 0.08% -1.23% Government services 7899 5.16% 3.91% 13.62% 4.99% -2.02% 19.00 0.93% -0.20% Personal services 11934 4.57% 4.71% Aggregate Services 52208 5.00% 4.77% 26.77% 14.07% -3.64% 63.91 0.50% 0.44% Annex: Page 16

Argentina Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 25452 1.94% 3.19% 17.90% -11.24% -2.22% 16.60 2.64% 3.22% Mining 8565 3.10% 0.47% 0.50% 0.13% 0.32% 199.94 0.68% -8.95% Manufacturing 75568 1.77% 4.41% 23.50% -11.55% -0.28% 37.54 1.67% 1.72% Utilities 1309 5.34% 3.73% 1.20% -0.48% -0.22% 12.73 4.80% 3.55% Construction 16437 1.73% 5.29% 8.50% -0.92% 1.98% 22.57 0.21% -0.72% Trade services 42601 2.20% 4.29% 17.60% 3.45% -0.08% 28.25-0.06% 1.40% Transport services 14643 4.19% 7.75% 7.20% -1.22% -1.14% 23.74 2.82% 6.56% Business services 9011 3.59% 2.50% 3.34% 6.55% 1.16% 31.48-0.97% -1.61% Government services 32321 2.16% 3.04% 13.52% 10.73% 0.87% 27.90-1.11% -0.22% Personal services 9393 2.58% 3.81% 6.74% 4.53% -0.38% 16.28-0.53% 1.23% Aggregate Services 107970 2.72% 4.39% 48.40% 24.05% 0.42% 26.04-0.11% 1.40% Annex: Page 17

Brazil Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 31529 3.54% 3.98% 49.02% -32.32% -5.60% 1.91 3.49% 4.48% Mining 7144 5.28% 5.31% 0.44% -0.14% 0.01% 47.74 3.40% 2.54% Manufacturing 98004 3.36% 2.39% 13.30% -1.19% 0.09% 21.90 0.80% -0.13% Utilities 9424 5.73% 3.37% 1.27% -0.87% -0.03% 21.97 5.89% 1.66% Construction 28664 3.61% 2.81% 6.32% 1.21% 0.78% 13.48 0.37% -0.74% Trade services 75599 3.65% 4.03% 9.53% 11.37% 1.20% 23.58-1.11% 0.95% Transport services 21263 4.95% 0.90% 3.17% 1.55% 0.31% 19.96 1.10% -2.16% Business services 79379 3.83% 5.56% 5.25% 5.81% 2.09% 44.97-0.84% 0.90% Government services 81259 3.92% 2.73% 5.84% 6.27% 0.13% 41.37-0.71% 0.17% Personal services 16657 4.34% 3.44% 5.87% 8.31% 1.03% 8.43-0.69% 0.21% Aggregate Services 274159 3.95% 3.56% 29.65% 33.31% 4.76% 27.48-0.74% 0.29% Annex: Page 18

China Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 563652 4.06% 4.14% 80.77% -44.07% -13.30% 2.03 4.05% 6.83% Mining 28882 10.33% 11.83% 1.07% 0.21% 0.06% 7.81 7.69% 10.74% Manufacturing 142259 11.50% 11.23% 7.78% 11.39% 4.65% 5.31 6.88% 7.59% Utilities 16717 10.57% 11.88% 0.14% 0.35% 0.05% 34.28 5.06% 10.12% Construction 53062 9.57% 12.39% 1.22% 6.53% 1.44% 12.59 2.58% 9.50% Trade services 91429 9.64% 12.19% 2.34% 7.34% 1.87% 11.35 3.74% 9.22% Transport services 47780 10.30% 10.86% 1.54% 2.47% 0.62% 9.02 5.58% 8.41% Business services 31925 11.50% 11.75% 0.65% 0.78% 0.31% 14.37 7.17% 8.44% Government services 56009 10.20% 11.54% 3.29% 2.46% 0.82% 4.94 6.54% 9.24% Personal services 15809 10.17% 12.45% 1.20% 12.54% 3.48% 3.83 1.62% 8.62% Aggregate Services 242952 10.24% 11.69% 9.01% 25.59% 7.10% 7.83 4.51% 8.56% Annex: Page 19

Thailand Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 229588 3.16% 2.10% 77.93% -39.66% -10.24% 18.58 2.74% 3.02% Mining 9751 8.51% 4.64% 0.33% -0.22% -0.01% 186.38 9.19% 4.21% Manufacturing 138671 8.05% 5.50% 5.36% 8.72% 0.52% 163.22 3.20% 3.58% Utilities 7347 9.53% 5.32% 0.14% 0.14% -0.07% 334.76 5.28% 6.09% Construction 58363 3.52% 2.95% 1.21% 4.98% 2.31% 303.25-2.76% -3.17% Trade services 237788 4.89% 2.92% 7.97% 15.42% 4.95% 188.25-0.10% -0.97% Transport services 44571 6.64% 4.01% 1.70% 1.22% 0.03% 165.73 2.93% 2.39% Business services 10309 8.54% 7.97% 0.77% 2.21% 0.62% 84.26 2.67% 3.93% Government services 11092 6.72% 5.17% 3.39% 5.65% 1.39% 20.63 1.88% 1.92% Personal services 108161 5.32% 3.19% 1.20% 1.55% 0.51% 568.03 0.92% -0.35% Aggregate Services 411922 5.47% 3.58% 15.03% 26.05% 7.50% 172.89 0.63% 0.03% Annex: Page 20

India Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 2637357 2.70% 3.16% 71.97% -17.31% -4.98% 19.07 1.13% 2.86% Mining 142744 5.50% 4.88% 0.51% -0.02% -0.05% 144.73 3.30% 4.75% Manufacturing 767024 6.18% 7.44% 9.44% 2.15% 0.23% 42.27 3.31% 5.99% Utilities 61900 7.04% 5.95% 0.29% -0.04% 0.00% 111.72 5.02% 4.93% Construction 466038 5.62% 9.56% 1.37% 5.79% 2.41% 176.91-0.89% 3.94% Trade services 657725 6.70% 8.98% 5.02% 6.54% 1.40% 68.24 2.19% 6.35% Transport services 230308 7.70% 9.99% 2.42% 2.38% 1.03% 49.62 3.54% 6.14% Business services 223326 8.24% 11.19% 0.47% 1.76% 0.95% 248.72 1.80% 3.99% Government services 480874 6.29% 6.35% 5.78% -1.64% -0.73% 43.32 4.82% 6.86% Personal services 148531 5.15% 6.99% 2.73% 0.38% -0.25% 28.27 2.50% 6.57% Aggregate Services 1740764 6.91% 8.82% 16.41% 9.43% 2.40% 55.21 3.38% 6.52% Annex: Page 21

Mexico Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 150367 1.96% 2.07% 41.73% -27.38% -1.96% 28.82 1.17% 0.99% Mining 151443 3.59% 0.24% 1.18% -0.79% -0.06% 1027.34 2.92% -0.76% Manufacturing 442746 3.31% -0.07% 17.98% -2.33% -3.97% 196.97 0.16% -0.15% Utilities 18092 5.51% 3.22% 0.43% -0.11% -0.14% 335.31 2.71% 4.64% Construction 212989 2.76% 1.28% 4.66% 5.15% 1.65% 365.39-2.55% -2.87% Trade services 524590 3.19% 1.91% 11.91% 10.24% 0.35% 352.18-1.84% -0.61% Transport services 119063 5.38% 3.70% 3.24% 1.46% -0.50% 293.53 0.88% 2.33% Business services 256565 3.89% 5.00% 1.64% 5.93% 2.46% 1253.66-3.40% -1.38% Government services 396447 2.59% 0.50% 10.69% 4.65% 1.71% 296.64-1.78% -2.98% Personal services 60222 3.11% 1.24% 6.54% 3.18% 0.46% 73.63-1.37% -1.58% Aggregate Services 1356886 3.46% 2.47% 34.02% 25.46% 4.48% 318.96-1.43% -0.69% Annex: Page 22

Bolivia Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 3462 2.66% 2.63% 61.50% -43.33% -13.47% 3.78 2.95% 5.24% Mining 4906 1.97% 6.36% 3.18% -2.35% -1.45% 103.50 2.56% 14.10% Manufacturing 3447 3.05% 4.04% 9.26% 4.14% 2.66% 25.02-0.69% -1.29% Utilities 327 5.28% 3.68% 0.10% 0.14% -0.16% 220.88 0.18% 5.76% Construction 1167 2.15% 3.73% 3.88% 5.72% 0.48% 20.20-2.87% 0.11% Trade services 2709 2.99% 3.10% 5.47% 14.35% 1.36% 33.25-3.00% -0.69% Transport services 1229 5.65% 4.31% 2.89% 4.50% 2.28% 28.60 0.38% -2.47% Business services 1395 3.85% 1.57% 0.48% 6.63% 3.10% 194.49-5.56% -6.95% Government services Personal services 6421 2.27% 3.44% 13.24% 10.21% 5.19% 32.60-1.94% -2.13% Aggregate Services 11754 3.23% 3.28% 22.08% 35.68% 11.93% 35.77-1.97% -2.10% Annex: Page 23

Chile Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 549345 4.90% 5.92% 26.47% -17.69% -1.27% 736.24 5.37% 4.82% Mining 1855289 4.68% 3.71% 2.92% -0.08% 1.34% 22544.28 2.35% -4.99% Manufacturing 3405578 3.11% 4.06% 20.15% -10.58% -3.56% 5997.45 2.65% 4.87% Utilities 283639 3.10% -3.19% 0.78% 0.13% 0.24% 12924.76 0.36% -8.31% Construction 1123297 4.07% 6.08% 5.84% 2.68% 0.38% 6824.79 0.74% 3.10% Trade services 1598856 4.21% 4.44% 11.00% 16.60% 6.00% 5157.95-0.49% -0.49% Transport services 764671 5.71% 5.79% 6.03% 0.35% -0.97% 4496.03 3.15% 4.77% Business services 1845693 5.34% 4.90% 2.67% 8.61% 0.60% 24538.66-0.71% 1.88% Government services Personal services 4196123 2.72% 3.84% 24.14% -0.03% -2.76% 6167.97 0.37% 2.50% Aggregate Services 8405344 4.13% 4.63% 43.84% 25.54% 2.87% 6802.75 0.59% 1.73% Annex: Page 24

Colombia Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 9668786 2.69% 2.13% 40.30% -21.68% -5.95% 3908.44 1.51% 2.03% Mining 4334860 4.99% 2.99% 0.85% 1.58% 1.03% 83136.48-0.84% -5.28% Manufacturing 14149417 3.43% 3.51% 14.25% -3.00% -0.25% 16174.12 0.88% 0.80% Utilities 2773827 4.39% 2.85% 0.38% -0.10% -0.09% 119695.67 1.99% 2.70% Construction 6807654 3.39% 7.59% 4.44% 2.26% 1.65% 25001.07-0.78% 1.63% Trade services 13786683 3.32% 4.40% 12.18% 16.57% 3.55% 18447.14-1.95% 0.12% Transport services 4953958 4.69% 5.52% 4.06% 2.40% 1.76% 19885.79 0.33% -0.68% Business services 6324151 4.72% 5.64% 5.62% 3.00% 2.69% 18342.62 0.46% -1.11% Government services Personal services 11256361 4.55% 3.36% 17.93% -1.03% -4.40% 10225.95 1.52% 2.79% Aggregate Services 36321154 4.20% 4.43% 39.78% 20.94% 3.61% 14873.37-0.03% 0.86% Annex: Page 25

Costa Rica Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 267456 3.15% 2.83% 41.72% -26.88% -4.60% 1320.04 2.16% 2.59% Mining 3583 3.39% 1.50% 0.29% -0.13% 0.02% 2516.75 1.19% -2.78% Manufacturing 330179 4.78% 2.97% 13.29% -0.90% -4.41% 5116.50 1.30% 3.09% Utilities 30315 5.62% 3.89% 1.07% 1.40% 1.00% 5808.08-0.18% -4.22% Construction 100477 4.56% 6.70% 6.45% -1.29% -1.11% 3208.36 1.47% 5.65% Trade services 489093 3.47% 2.73% 10.46% 13.30% 2.39% 9633.18-2.17% -1.29% Transport services 52906 8.14% 9.40% 4.10% 2.54% 1.00% 2654.70 3.11% 4.52% Business services 138085 6.08% 8.49% 2.29% 8.63% 3.80% 12440.39-1.55% 0.94% Government services 486481 2.96% 2.91% 13.48% 2.12% 1.18% 7432.66-0.99% -0.84% Personal services 173128 3.74% 3.87% 6.85% 1.21% 0.73% 5207.71-0.29% -0.08% Aggregate Services 1339693 4.19% 4.87% 37.17% 27.80% 9.10% 7422.25-0.85% 0.32% Annex: Page 26

Japan Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 7035202-0.17% -1.11% 18.84% -13.93% -1.01% 650.14 3.22% 1.95% Mining 1424963-2.78% -10.54% 0.50% -0.42% -0.05% 4998.90 1.85% -4.79% Manufacturing 38438906 2.47% 0.20% 24.36% -9.81% -4.31% 2747.63 3.77% 4.04% Utilities 3233089 3.30% 1.44% 0.49% 0.26% 0.07% 11423.40 2.18% 1.60% Construction 23919573 0.36% -2.38% 7.70% 0.72% -1.37% 5407.47 0.11% 0.27% Trade services 18846917 3.46% -1.19% 20.82% 1.49% -1.82% 1576.49 3.25% 0.76% Transport services 12560451 2.30% 0.63% 5.46% 0.63% 0.14% 4004.34 1.99% 1.57% Business services 9482871 4.80% 0.81% 7.04% 7.43% 1.83% 2343.78 2.91% 0.63% Government services 34160530 2.37% 1.87% 11.83% 9.17% 5.79% 5026.81 0.88% -0.20% Personal services 8645719 2.54% -0.01% 2.95% 4.47% 0.74% 5098.74 0.17% 0.10% Aggregate Services 83696488 3.04% 0.45% 48.11% 23.18% 6.68% 3029.30 2.00% 0.63% Annex: Page 27

Peru Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 7470 2.69% 3.68% 46.02% -23.60% -5.74% 4.37 1.27% 3.67% Mining 8618 2.80% 5.25% 1.44% -0.19% 0.32% 161.14-0.07% -0.12% Manufacturing 17441 2.85% 5.74% 13.61% -4.75% -2.56% 34.45 0.70% 6.00% Utilities 835 5.58% 5.26% 0.19% 0.21% 0.12% 117.06 0.36% -0.73% Construction 3734 5.13% 8.77% 4.12% 3.13% 3.82% 24.36 0.40% -1.35% Trade services 19635 2.96% 5.95% 9.01% 15.93% 3.23% 58.59-2.77% 2.12% Transport services 5898 4.21% 6.71% 3.93% 5.48% 2.15% 40.35-1.24% 1.63% Business services 8480 4.09% 6.46% 4.13% 3.01% 0.62% 55.24-0.55% 3.11% Government services Personal services 20637 2.54% 4.65% 17.54% 0.78% -1.96% 31.63-0.79% 3.33% Aggregate Services 54649 3.20% 5.77% 34.62% 25.20% 4.04% 42.45-1.40% 2.66% Annex: Page 28

Singapore Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 151-1.21% 0.04% 3.46% -3.16% 0.05% 6.73 1.04% -5.40% Mining 20-1.32% 0.04% 0.34% -0.31% -0.01% 9.24 0.99% 0.22% Manufacturing 4647 7.21% 3.70% 21.98% -4.17% -2.92% 32.48 3.70% 1.41% Utilities 274 6.93% 3.98% 1.17% -0.67% 0.09% 36.00 5.10% -1.76% Construction 747 6.98% 7.79% 6.62% 4.70% -1.76% 17.34 1.56% 5.34% Trade services 7556 5.25% -0.53% 23.49% 1.16% 5.52% 49.42 1.14% -6.59% Transport services 1043 9.15% 5.00% 12.14% 0.46% 1.49% 13.20 4.92% -0.13% Business services 2167 8.87% 6.42% 3.55% 17.64% 7.23% 93.80 0.17% -1.69% Government services Personal services 2761 5.91% 4.59% 27.25% -15.65% -9.70% 15.56 4.10% 7.05% Aggregate Services 13527 6.76% 3.20% 66.43% 3.61% 4.55% 31.28 2.58% -1.26% Annex: Page 29

South Korea Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 12796936 1.98% 1.19% 49.05% -42.14% -3.71% 2771.19 4.64% 4.37% Mining 1102971 1.14% -1.19% 1.08% -1.01% -0.01% 10858.46 5.82% -0.97% Manufacturing 6082732 10.08% 5.25% 13.64% 4.56% -2.11% 4736.09 6.78% 5.14% Utilities 226539 12.13% 5.64% 0.24% 0.07% 0.01% 9934.55 8.89% 4.14% Construction 5602722 6.11% 2.04% 3.01% 4.93% 0.46% 19803.02 1.19% 0.23% Trade services 8485600 6.36% 2.45% 15.31% 8.50% -3.40% 5887.63 2.78% 2.59% Transport services 2082024 8.81% 4.23% 3.59% 2.88% 0.51% 6158.50 4.76% 2.15% Business services 7463809 5.78% 2.44% 1.30% 12.76% 4.07% 60965.53-2.62% -2.17% Government services Personal services 34340843 4.19% 3.27% 12.79% 9.45% 4.19% 28529.13 0.40% -0.06% Aggregate Services 52372276 5.27% 3.05% 32.98% 33.59% 5.36% 16864.52 1.07% 0.97% Annex: Page 30

Taiwan Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 179430 0.36% -0.73% 35.27% -30.03% -2.45% 107.10 3.20% 2.24% Mining 43183 2.59% 9.11% 1.52% -1.48% -0.08% 599.76 10.28% 20.72% Manufacturing 241100 6.67% 1.47% 20.20% 7.07% -0.47% 251.21 3.80% 0.75% Utilities 17145 4.51% -6.68% 0.36% 0.07% 0.05% 1008.51 1.99% -8.76% Construction 42153 4.60% -2.89% 4.85% 2.75% -1.06% 183.06 1.41% -2.49% Trade services 82748 9.07% 3.76% 15.21% 8.37% -0.20% 114.53 5.77% 2.92% Transport services 51154 6.94% 1.98% 5.48% -0.84% -0.49% 196.47 5.28% 2.09% Business services 44832 9.34% 6.59% 1.53% 8.61% 2.30% 617.98 2.24% 2.97% Government services 246269 5.24% 1.68% 10.35% 2.94% 2.38% 500.93 2.53% -1.19% Personal services 37384 7.97% 4.54% 5.24% 2.53% 0.02% 150.23 4.81% 3.59% Aggregate Services 462387 7.29% 3.58% 37.81% 21.62% 4.00% 257.47 4.00% 1.95% Annex: Page 31

United States of America Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 43474 3.05% 3.45% 3.23% -1.77% -0.12% 15.49 3.78% 4.52% Mining 214567 0.55% 2.46% 0.74% -0.24% 0.11% 334.92 0.27% 0.16% Manufacturing 588415 2.11% -0.39% 22.16% -13.50% -4.04% 30.54 3.22% 3.71% Utilities 100155 1.72% -1.03% 0.67% -0.29% -0.02% 172.61 1.86% -0.20% Construction 490817-0.53% -5.28% 5.33% -0.28% -0.74% 106.04-1.66% -3.78% Trade services 475765 3.53% 1.15% 20.97% 3.04% 0.27% 26.10 1.88% 1.24% Transport services 188050 3.18% 1.22% 6.00% -1.57% -0.41% 36.03 2.64% 2.34% Business services 1163603 3.35% 1.61% 9.20% 8.85% -0.19% 145.58 0.33% 1.93% Government services 1487940 1.44% 1.99% 26.41% 4.57% 4.83% 64.81-0.25% 0.49% Personal services 168512 2.60% 0.18% 5.30% 1.18% 0.32% 36.60 0.80% -0.13% Aggregate Services 3483869 2.67% 1.52% 67.88% 16.07% 4.82% 59.05 0.84% 1.13% Annex: Page 32

Venezuela Gross value added - Local Currency - (millions) (1970) Change (1970s-2000s) Growth (1970s to 2000s) Ratio of to number of persons engaged Agriculture 5197 2.17% 2.27% 25.87% -16.82% -1.61% 7.02 1.45% 0.36% Mining 88428-0.19% -1.11% 1.53% 1.71% 1.53% 2023.41-5.27% -10.47% Manufacturing 18500 2.36% 0.76% 14.61% -4.86% -1.98% 44.27 0.00% -0.91% Utilities 562 5.29% 3.60% 1.24% -0.66% -0.21% 15.82 3.79% 3.12% Construction 13636 2.13% 4.34% 6.01% 2.44% 0.41% 79.24-2.06% 0.22% Trade services 19253 1.73% 4.50% 13.84% 9.51% -2.34% 48.61-2.89% 1.85% Transport services 4370 4.74% 8.17% 4.58% 6.39% 2.83% 33.33-0.89% 1.35% Business services 2886 3.93% 6.16% 4.54% 2.77% 0.78% 22.22-0.67% 1.33% Government services Personal services 11604 3.73% 4.86% 27.78% -0.48% 0.57% 14.60 0.36% 1.01% Aggregate Services 38113 3.11% 5.50% 50.74% 18.19% 1.85% 26.25-1.04% 1.57% Annex: Page 33

Part II. Convergence Annex: Page 34

Annex: Page 35

Annex: Page 36

Annex: Page 37

Annex: Page 38

Annex: Page 39

Annex: Page 40

Annex: Page 41

Annex: Page 42

Annex: Page 43

Part III. Peak Growth Annex: Page 44

Peak Growth *Services include: Wholesale and Retail trade; repair of motor vehicles, motorcycles and personal and household goods, Hotels and Restaurants Transport, Storage and Communications Financial Intermediation, Real Estate, Renting and Business Activities [Africa Sector Database - University of Groningen] Annex: Page 45