2 August 2017: ARSO President and SAZ Director General, Dr Eve Christine Gadzikwa Delivers A Keynote Address at the SADC Industrialisation Week and Made in Africa Conference at the Core Shopping Centre, Sunninghill Johannesburg, South Africa.
It is highlighted that the production and export structures of most African economies are geared to primary commodities such as minerals, timber, coffee, cocoa, and other raw materials, for which demand is externally oriented. Most lack the industrial capacity for diversified manufactured goods to support trade within regional markets. Yeats (1999) points to the fact that the Sub-Saharan African countries appear to have relatively few goods to trade with each other. An analysis of historical changes in the other countries’ exports indicates that the “non-complementarity” problem in African trade cannot be resolved quickly unless the continent Transforms its production systems and improves its industrial and manufacturing capacity. To add to this, various reports by UNCTAD and UNECA show that African countries do not trade much with each other, meaning, they have been unable to fully harness the synergies and complementarities of their economies and take full advantage of the economies of scale and other benefits (such as income and employment generation) that greater market integration would have provided. In 2014, trade between regions accounted for approximately 16% of Africa’s total. For Asia, Europe and the Americas, intra-regional trade represented, on average, about 61%, 69% and 56%, respectively, of their total trade in 2014 (Africa Economic Outlook 2016).
In many African countries, a relatively small manufacturing sector reduces the potential for participation Global trade and regional value chains and provides additional incentives for specialization in primary sectors. While Africa contributed 8 percent to total world exports in 1948, this decreased to 6 percent in 1980 and 2.3 percent in 2000, before improving somewhat to 3.3 percent in 2010. The World Bank in its Africa’s Competitive Report 2015, reiterates this situation.” As discussed in the 2013 Africa Competitiveness Report, Africa’s share of global trade remains very small, at around 2 percent of world trade, and exports overall remain highly focused on commodities of which two-thirds is determined by forward integration related to the continent’s rich endowments in natural resources and low levels of industrialization”. Global trade remains strongly clustered in and around the manufacturing hubs in Europe, North America, and East Asia.
According to the UNECA Chief Executive Officer, Lopes Carlos, Africa’s need to aggressively pursue the industrialization path has become more compelling in light of the need to sustain current growth standards. The African Union calls on the African institutions to give priority to structural transformation, an overarching objective of the African Union’s Agenda 2063. The African Union has adopted an “Action Plan for the Accelerated Industrial Development of Africa.” and the newly adopted United Nations Sustainable Development Goals (SDGs) highlights the need for job creation and industrialisation with two themes introduced largely at the request of African governments. This is with respect to Goal 8- “Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”; and Goal 9 “Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation (UN, (A/70/L.1-2015)”.
The ARSO President highlighted that Industrial development is important for SADC and Africa generally as it boosts economic growth, with SADC having launched its industrialization strategy & road map 2015-2063 at an extra ordinary summit hosted in Zimbabwe in April 2015. Dr. Gadzikwa observed that Industrialization can contribute to progressed transformation of agriculture, trade, transport and all other important activities and that industrialisation is now regarded as synonymous with economic growth and development since no progressive country can afford to neglect industrialization. The ARSO President highlighted the fact that the future growth and transformation of the SADC economies requires long-term focused qualitative and quantitative modifications in industrial infrastructure and the Industrialization will need to be focused on competitiveness, ease of doing business, enhanced quality of products that will be able to compete internationally. Quality infrastructure (Standardisation, Metrology, Conformity Assessment and Accreditation) is positively related to the achievement of social, economic and political goals. Competitive, safe, reliable and cost-effective goods and services are a key prerequisite for enhancing an industry’s competitiveness and export market share in tradable goods and services and industries therefore have a continuous need for effective Quality Infrastructure. Read the speech…
See also: http://www.insurancegateway.co.za/InvestmentConsumers/PressRoom/ViewPress/Irn=16113&URL=SADC+must+reposition+itself+in+order+to+industrialise#.WZVzSOlLeM8