Back a changing economic agenda for Africa

AS ALL attention has been focused on Brics (Brazil, Russia, India, China and SA), an important meeting of Africa’s experts and ministers in Abidjan last month passed unnoticed. Yet this meeting might signal a renewal of Africa’s economies of considerable significance. The theme of the meeting was Industrialisation for an Emerging Africa. As it is now generally accepted that Africa’s economies are growing at more than 5% a year, this emphasis on placing Africa on a higher trajectory may be justified.

The main message to emerge, and which for the first time received strong support, was that more value should be added locally to Africa’s raw materials. At present, only 10% of food is processed locally. This will require far more effective industrial strategies and policies and a great deal more research on the value chains as primary commodities are turned into final products. Associated with this research is the investigation of the various linkages to necessary inputs, capabilities and institutions that make natural resources into products we can use.

What was distinctive about the opening session was the meeting of minds between Nkosazana Dlamini-Zuma, the head of the African Union Commission, and Carlos Lopes, the new head of the United Nations Economic Commission for Africa (ECA). Both come to their positions with a reputation for upholding progressive policies and working for change. We can expect that, together, they will be able to foster faster and better performance across Africa. At the same time, there would continue to be close collaboration with the African Development Bank, especially in financing infrastructure.

Lopes said it was imperative for Africa to use its growth as a platform for “broad structural transformation”, which he defined as a “large-scale transfer of resources from one sector to another due to changes in economic fundamentals and policies” — a change in the sectoral composition of gross domestic product, shifting employment and output from the primary sector to industry and modern services. This implied a greater use of technology and increased productivity. A commitment to industrialisation would realise this shift. It is vital to increase the size of domestic markets, although, even now, Lagos has a larger consumer market than Mumbai, but 70% of imported goods could be produced locally.

A concern at the meeting was that, despite the positive growth trajectory, it has not translated into job creation or poverty reduction. Economies continue to rely on primary commodity production for export. Progress in promoting value addition, linkage development and diversification of exports is limited to a few countries, sectors and commodities.

To make more of Africa’s commodities requires inserting indigenous firms in regional and global value and supply chains. Immediate attention to infrastructure and energy, as the main drivers of industrialisation, is essential.

The private sector came in for special attention, it being urged to engage in the industrial sector and public programmes via strategic partnerships.

On trade issues, the meeting urged that trade agreements should allow for the policy space necessary for industrialisation and regional integration.

Lopes introduced a new programme for the restructuring of the ECA and recalibrating its programmes. A large number of new staff is being recruited, with emphasis on statistical skills to provide assistance to member states in the design and implementation of industrial strategies. In short, it will become a thinktank for all of Africa. To achieve this, the ECA will enhance capabilities in the production of knowledge, analytical insights, robust statistics and the production of core policy. There will be more specialisation by individuals and in departments, and duplication will be avoided.

Governance will be tackled more from an economic than a purely political standpoint. A great deal of attention was given to training. These new developments have been approved by the heads of state and governments of the African Union and substantial funding is available, partly by cutting back on costly conferences.

It is hoped SA will join this process with the necessary vigour. While Brics represents a major milestone in our international position, our backyard remains Africa. For historical, cultural and sheer economic advantage, we need to get deeply involved in the new agenda of industrialisation of the continent.

Turok, an MP, participated in the production of the ECA’s Economic Report for Africa.