Volume 10, Issues 2 & 3
The African Manufacturing Firm: An Analysis based on Firm Surveys in Seven Countries in Sub-Saharan Africa. Dipak Mazumdar and Ata Mazaheri. New York: Routledge, 2003. 451 pp.
Spanned over thirteen key chapters, besides two introductory and concluding ones, this book by Mazumdar and Mazaheri aims at providing a comprehensive examination of the African manufacturing sector (only organized) in Sub-Saharan Africa through data made available by the World Bank’s RPED (Research Program in Enterprise Development) surveys for the period 1992-96. The authors have made a genuine effort in examining carefully the entirety of available data and thereby have come up with a detailed analysis of the African manufacturing firm. Beginning with various aspects related to the economic structure and production relations in the African manufacturing firm, the analytical exercise focuses on examining various factors of production along with providing a detailed analysis of the dynamics of firm behavior, and its competitiveness and export performance.
In an informative introduction, the authors provide an economic profile of the (focused) seven African economies viz. Cameroon, Cote d’Ivoire, Ghana, Kenya, Tanzania, Zambia and Zimbabwe in the first chapter. As background to the study, this chapter examines their status in terms of their economic development attainments, fiscal and monetary situations, and their external and manufacturing sectors. Chapters two and three are devoted to the examination of the economic structure and production relations in the manufacturing sector of these economies. Chapter two specifically reveals that the African manufacturing sector is biased towards large firms – a result derived primarily due to the specific nature of the data. Nevertheless, the authors do not deny the existence of dualistic structures in the African manufacturing sector. Chapter three specifically aims at examining the relative productivity of small manufacturing firms vis-à-vis large ones so as to explore “the popular thesis of ‘small is beautiful’” (pp. 63).
Chapters four to eight constitute the subject-matter of the third section that is focused on examining various factors of production in the African manufacturing firm. Chapter four examines the aspect of entrepreneurship in these firms. The aspect of finance (capital) is covered by the fifth chapter and the aspect of labor is covered by the sixth chapter. Similarly, the seventh chapter examines the impact of regulations and infrastructure relative to other problems faced by the firm. It is found that credit constraints have the most affect followed by infrastructure and regulatory constraints. Chapter eight examines contract flexibility and enforcement in the African manufacturing firms and reveals various methods in the form of guarantees and penalties used by firms to avoid the problems besides highlighting various other aspects of contract enforcement and flexibility in these firms.
Chapters nine to twelve reveal the inherent dynamics in the behavior of the firm. Chapter nine analyses capacity utilization whereas chapter ten focuses on examining technical efficiency. Other aspects of investment and growth are examined in eleventh and twelfth chapters. Chapter nine reveal a low degree of capacity utilization in manufacturing firms in comparison to the international standards, with large dispersion among the firms. Chapter ten reveals inter-country differences in African manufacturing firms’ ability to attain their potentials of technical efficiency by using the stochastic frontier production function approach. Chapter eleven looks at the dynamics of investment in these manufacturing firms by revealing various insights related to the magnitude and the financing of investment besides diagnosing the determinants of investment. Similarly, chapter twelve provides a time-series analysis of the growth of the manufacturing firms. Amongst other aspects, it explores the determinants of growth of these manufacturing firms. Similarly, competitiveness and export performance is examined at length in the thirteenth and fourteenth chapters. The fifteenth chapter finally concludes the inferences derived from the detailed empirical analysis of the African manufacturing firm.
From a careful study of this volume, it is learned that the authors through a detailed examination of the African manufacturing firm have provided insights into various operational aspects of these firms. Given the state of knowledge on the manufacturing firms in Africa, this book containing detailed analyses is a welcome output. Nevertheless, there are a few reservations. Since employment is one of the desirable outcomes of the industrial process, the analysis remained more or less confined to examining labor only as a factor of production and no effort has been made to highlight the human aspect of labor. What could have been more desirable is to let the readers know about the type of employment generated by the manufacturing firms in Africa. There is also a large prevalence of informal sector in Africa. In such a situation, the given analytical exercise does not reveal much about the linkage of (organized) manufacturing firms with the small (household) manufacturing firms. The authors make it clear at the outset that given the nature of data, the analysis focuses on organized manufacturing. But, as the authors have done some adjustments with data in few chapters like twelfth focusing on growth, here too they could have supplemented the findings with other data source revealing the plight of working masses in manufacturing firms in Africa. Such a suggestion is relevant only to extend the scope of the study to readers like this reviewer who besides industrial performance are also interested in looking at the aspect of labor.
Nevertheless, the book really reveals a commendable research effort of the writers. The writers have made a novel attempt to provide a detailed and rigorous analysis of the data available from World Bank’s RPED surveys (covered in three waves) for the period 1992-96. Moreover, the authors also tried to locate their findings in a comparative perspective with other studies and relevant literature. This exercise increased manifolds the usefulness of the study. The questions explored are equally relevant and hold significance mainly for their relevance in providing policy inputs to strengthen the manufacturing base of Africa. Owing mainly to its detailed analytical exercise, this book deserves a wide readership. I will be of great use to those who wish to know more about Africa, its economy in general and the manufacturing sector in particular. Specifically, it is of relevance to policy makers, researchers and academicians working in the area of industrial economics.
Varinder Jain Centre for Development Studies, Thiruvananthapuram, Kerala, India