Africa's Economic Transformation: A Big Data Perspective

Africa is a continent of great economic potential. With a population of 1.5 billion at median age of 19 today, projected to reach 2.5 billion by 2050, vast natural and mineral resources, yet a share of only ∼3% in global GDP and trade, Africa's economic transformation must materialize to provide opportunities for its youth and to foster a more balanced global order in the face of shared challenges. Agenda 2063 sets an ambitious path to achieve this, and with the formal enactment of a continental free trade area, a substantial landmark has passed. However, trade and regional value chains (RVCs) must pick up significantly to generate the desired transformation, supported by industrialization. For this, macroeconomic and financial stability are needed alongside industrial/RVC policies and large-scale investments in infrastructure and human capital. This doctoral dissertation contributes to our understanding of these critical ingredients. It documents the continent’s progress in macroeconomic stability and investigates its drivers. It also dissects Africa’s integration into global and regional value chains, eliciting progress, benefits, potentials, and challenges towards/of regional economic integration. Lastly, it zooms in on the continent’s infrastructure, utilizing geospatial big data and modern structural and empirical methods to provide evidence on local and global investment potentials at unprecedented spatial detail and scale. By combining rigorous quantitative economics and (causal) machine learning with the richest data on global production, trade, infrastructure, and economic geography available at the time of writing, it produces very detailed and substantive evidence on critical aspects of Africa’s present and future economic transformation. It thus enhances our academic understanding of the continent, its economic potential and challenges, but also informs policies to accelerate economic progress and transformation at scale.

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