Page 6 - Economic transformation

On the other hand, the construction industry has gained significant importance

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since 2013. In 2014, the construction industry was the 6 biggest industry. It has since

more than doubled in significance, from contributing 5 percent of GDP in 2014 to

accounting for 11 percent of GDP in 2017, displacing making it the second largest

industry in the economy. An immediate implication of this is that the economy, while still

in nascent stages, is ‘getting ready’ for the beginning of structural transformation that

will result in an economy that is increasingly biased towards construction and the

fisheries industries as anchor industries.

If this structural transformation is nurtured correctly, it will lead to a rise in the

demand of more sophisticated services to service these growing industries further

growing the overall significance of the services sector. Ultimately this will depend, at the

minimum, to the availability of relevant skills, a strengthening of property rights and the

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expansion of bulk infrastructure services .

Economic growth – a necessary but not sufficient condition

The centrality of economic growth in the narrative on economic transformation

means that economic transformation is unlikely to happen without economic growth.

That said, economic growth alone does not guarantee economic transformation.

Economic growth is hence a necessary, but not sufficient condition for economic

transformation . As noted earlier, a number of other factors (economic and otherwise)
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2 Defined as public infrastructure services of which water, sewage and electricity are generated, collected,
stored, purified, conveyed and disposed of, as is relevant, and which is connected to a reticulation system
which in turn distributes services to and from end users.
3 In economics a condition A is said to be necessary for a condition B if and only if, the non-occurrence of A
guarantees the non-occurrence of B. At the same time, a condition A is said to be sufficient for a condition B if
and only if, its occurrence guarantees the occurrence of B. In this case, economic growth is a necessary
condition for economic transformation as without economic growth there can’t be economic transformation.
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