Lewis’ (1954) depiction of development as the absorption of underemployed labour from
subsistence activities into modern industry is still valid, with two amendments. First, developing
countries can harness the forces of globalization to generate unprecedentedly rapid growth
through labour-intensive exports, as successive waves of East Asian countries have been
demonstrating for 50 years. Second, exports of traditional and non-traditional agricultural crops,
tourism, and fishing are viable alternatives to manufacturing in Africa. Africa has opportunities
to benefit from globalization, in manufacturing but even more in agriculture. In a competitive
world market, however, success depends on strict quality control and timeliness of delivery.
Private firms, including foreign investors, can supply capital, entrepreneurship and technology,
but require an enabling environment and public goods—contract enforcement, technical
assistance, and adequate infrastructure. When the government fails to provide public goods and
harasses formal-sector firms, domestic enterprises will shut down or become informal, and
foreign investors will look elsewhere. The workforce pays the price in the form of fewer
employment opportunities and lower incomes. Many African countries have made considerable
progress in restoring macroeconomic stability and improving the business environment, but
further efforts are needed to attain global competitiveness in labour-intensive industries to spur
sustained employment growth and rising earnings.