ABSTRACT
The accumulation of industrial capabilities in a competitive environment has many advantages for a developing economy. It affords a wider choice set for dealing more effectively with market shifts and volatility. Africa entered the twenty-first century with two institutional handicaps born of its deep-seated poverty and colonial legacies: the twinning of pervasive market failures and government failures. But, it can overcome these handicaps with massive investments in infrastructure and a favorable policy environment. Africa is certainly the biggest remaining challenge to development economists and policymakers alike. The lynchpin of an African industrial strategy must be "thinking big while starting small" – building pragmatically on existing capabilities while upgrading them and synchronizing the built-up capabilities with deep-veined domestic and global opportunities with the help of smart policies. Synchronizing the built-up capabilities with the right opportunities is where sensible industrial policy comes in.
