The Summit on Africa’s Industrialization and Economic Diversification will be convened under the theme “Industrialising Africa: Renewed commitment towards an Inclusive and Sustainable Industrialization and Economic Diversification.”
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OPERATIONALIZATION OF THE AFCFTA. THE NEXUS WITH INDUSTRIALISATION.
Trading under the African Continental Free Trade Area (AfCFTA) Agreement was that was launched on 1st January 2021. Once fully implemented, the AFCFTA will create a single African market for goods and services, covering an estimated 1.2 billion people with a combined GDP of over USD2.5 trillion across 55 member states. In August 2020, the Secretariat of the African Continental Free Trade Area was officially opened in Accra, Ghana, a significant milestone in the full implementation of the free trade agreement. These developments cap a heroic journey to build a one-Africa integrated economy that began in earnest decades back, amplified by the 10th Extraordinary Session of the Assembly of Africa Union Heads of State and Government (HoS/G) in Kigali, Rwanda that paved the way for signature to the African Continental Free Trade Area (AfCFTA) Agreement.
To achieve the aspirations of the AfCFTA, Africa’s industrialisation and transformation agenda needs to be supported at the highest national, regional, continental, and global levels. Such a focus will be key to accelerate efforts in a selected number of key policy areas – such as energy and road infrastructure, trade facilitation, financial sector development, education development, agro-industrial transformation, green industrialisation and technological innovation and transformation. Advancing the AfCFTA and Africa-Industrialization side-by-side with deliberate efforts to realize the mutually reinforcing interdependences between the two will provide Africa’s critical success pillar and condition for Agenda 2063.
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COVID-19 AND NEW NARRATIVE TOWARD ACCELERATED INDUSTRIALIZATION.
The advent of COVID-19 in 2020 has posed the most formidable risk to the smooth operationalisation of the AfCFTA, given its disruptive nature to business and commerce, whilst at the same time also put a check on the vulnerability of African economies, preventing delays in the launch date of the free trade area. Thus, the COVID-19 pandemic has further heightened the risks of perpetuating the continent’s trade and business vulnerability globally, with most commodity-dependent nations. While COVID-19 is creating a significant economic and health crisis, it also presents an invaluable opportunity for the continent to re-configure its development narrative towards prioritization of initiatives that foster to accelerate Africa’s industrialisation.
COVID-19 and its attendant disruption of global supply chains have brought to the fore the urgency and significance of driving industrialisation in the continent. More fundamentally, the pandemic has openly exposed the hollowness of African economies on several fronts, including the fragility and weakness of Africa’s industrial capabilities.
There is no doubt that, at this juncture, the development of strong regional and local/national value chains can be a game-changer to build a resilient SMEs production capacity in the continent, to seize the business opportunities emanating from the COVID-19 induced disruptions of Global value chains. Industrialisation prospects for the continent are anchored on unleashing the growth of small and micro-enterprises guided by the African Union SMEs Strategy, whose development was informed by evidence-based mapping of the peculiarities of the continent’s production systems. By creating business-enabling conditions across Member States that can enhance the longevity rate of Micro, Small and Medium-Sized Enterprises (MSMEs), the continent’s industrialisation momentum can be fuelled.
Learn more about the efforts and responses of the continent in the fight against the COVID-19 pandemic and beyond here.
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IDDA III AND AFRICA’S INDUSTRIALIZATION AGENDA
Whilst the continent’s industrial policy landscape stretches back to the 1980s from the First Industrial Decade for Africa, all the way to the Accelerated Industrial Development of Africa (AIDA, 2008), and globally, the United Nations General Assembly (UNGA) has further magnified the significance of Africa’s industrialisation through the adoption of a Resolution in July 2016 that dedicated the period 2016-2025 to the Third Industrial Development Decade for Africa (IDDA III), the performance has remained rather mixed. Under the circumstances, the development challenges currently confronting the continent, therefore, necessitate the need for effective, efficient and timely deployment of action beyond political rhetoric for any meaningful impact on delivering sustainable human development in the continent in the medium- to long-term more so.
It is encouraging to note that IDDA III presents yet another opportunity to rally global partnerships and efforts to work as a collective to drive structural transformation in Africa. As such, it should be optimally leveraged in this endeavour for any meaningful impact on delivering a sustainable and inclusive Industrialisation pathway for Africa. What is critical at the moment for Africa is to acknowledge, the need to chart a revived focus towards a rejuvenated Pan-African industrialisation agenda, and framework informed by lessons learnt this far from previous programmes, taking full cognisance of the current and evolving social, economic and political trends, and developmental needs of the continent. The continent’s capacity to deliver on Agenda 2063 hinges on industrialization. To buttress this, the UN SDGs have assigned Goal 9 towards building industries and resilient infrastructure as a way of strengthening developing economies’ capacity to address structural challenges and poverty alleviation. In addition, the IDDA III should be flexible enough to consider Africa’s industrialization within the context of uncertainties such as the global COVID-19 pandemic. Going forward, Africa’s industrialization agenda must unequivocally incorporate industries that prove to be resilient in the face of uncertainties and recovery-ready within the shortest possible time when industries are hard hit.
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INDUSTRIALIZATION FOR SUSTAINABLE DEVELOPMENT IN AFRICA.
Industrialization should not be perceived as a single pathway for sustainable development in Africa. Rather, Industrialization, with strong multisectoral and multi-directional linkages to domestic economies, will help African countries to achieve higher economic growth rates and economic diversification. Success in Industrialisation will be at the core of Africa’s efforts to address key structural economic growth and development weaknesses and fragilities, some of which COVID-19 has exposed – from poverty and inequality through to inadequately developed education, health, housing and sanitation services. Seeing beyond the current challenges requires policymakers to tackle head-on other supply-side structural bottlenecks and barriers such as energy and infrastructure for enhanced enterprise competitiveness. This also places due pressure on policymakers to improve business and regulatory regimes to enhance private capital flows, absorption and adaptation of technology, ICTs, artificial intelligence, and skills transfer to unleash private sector growth.
Furthermore, sustainable success on the Africa-Industrialisation front will only be achieved with deliberate efforts to integrate and systemically address Africa’s underlying development features, such as the micro-small-medium enterprises and informal economy, the urban-rural transition, socio-economic diversity across the 55 AU member states, as well as linkages between education-skills development and industry. Cross-cutting issues such as gender, climate change, energy security, youthful population and growing unemployment, to facilitate the evolution of a sustainable and inclusive industrialisation pathway for the continent.
Africa has a lot to learn from her own experiences on Industrialisation over the last 4-5 decades as well as from other continents. However, what is abundantly clear is that Industrialisation successes in Europe and the Americas and more recently in Asia cannot be replicated in Africa. Apart from just that, Africa has its own unique circumstances, and many of the factors that propelled industrial success in other continents no longer exist. This is why advancing Africa-Industrialisation has also to take deliberate consideration of what can and should work for Africa while ensuing interdependences with the rest of the world in those areas that can amplify the continent’s benefits.
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SUB-THEMES: SEVERAL AREAS OF DISCUSSIONS WILL FEATURE AT THE SUMMIT.
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Industrialisation and the AfCFTA – realizing the inter-dependencies: How to practically bring Africa-Industrialisation (manufacturing and tradeable services) and the AfCFTA (markets and trade) mutually reinforcing each other
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Industrialisation, government fiscal capacity and creating jobs: Africa-Industrialisation – in expanding the continent’s fiscal capacity (i.e. contribution to GDP) as well as creating jobs and entrepreneurship opportunities for Africa’s youthful populations
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Technological innovations, organizational capacity in driving enhanced and competitive Industrial performance: Africa’s Industrial capabilities (Industry 4.0 readiness, organisational efficiency, skills) in Africa’s economic sectors – Mining, Tourism, ICT, and Financial Services, Arts and Culture, Agro-Industry, Fisheries, Aquaculture and Marine Industries.
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Regional industrial value chains: Leveraging Regional Value Chains to optimise the continent’s industrial capability along AfCFTA implementation
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Partnerships and Alliances to deliver on Africa Industrialisation: Rallying Domestic and International Public-Private partnerships for enhanced planning and Implementation capabilities for accelerated-expanded industrial growth in Africa.
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Africa Industrialisation – multi-/cross-sectorial approaches as key condition for success: Aligning key cross sector conditions and policies for success: Energy Security, Institutions, Polities and legislation, Human capital – skills and intellectual capacity, Environmental resilience and Climate change (Green Industries)
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Youth and Women-led MSMEs in driving success in Africa Industrialisation: Africa-Industrialisation and special cross-cutting drivers for sustainable success: Youth, Micro-, Small Medium Enterprises, Women, Competitiveness, urban-rural transitions,
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Resource governance and leveraging financial and non-financial resources into Africa-Industrialisation: De-risking Africa-Industrialisation, catalysing domestic and international investments, technology transfer and local innovations to leapfrog Africa’s industrial growth
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Indigenous knowledge and Africa’s Industrialization: Protecting African indigenous knowledge with Intellectual Property Rights to integrate into Africa’s industrialisation
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Medical product industries in post COVID-19 area: with a special focus on Pharmaceutical industries.
