Inclusive industrialization: The tonic for Africa

Lazarus Sauti

Africa is endowed with a hodgepodge of natural resources from an immeasurable assortment of minerals that have the potential of positively transforming the continent if correct approaches are championed.

Because of natural resources, the continent is literally wealthy, but practically its citizens are amongst the poorest in the world.

Africans are living in abject poverty.

The question is, therefore, why Africans are so wretched yet the continent is resource endowed?

The answer needs no effort to unravel as it is simple and straight-forward. Africa is shamefully selling her innate resources in unprocessed form.

Minister of Industry and Commerce in Zimbabwe, Mike Bimha, concurs.

He thinks Africa is in extreme poverty largely because it exports its vast natural resources – mainly minerals – in raw form cheaply, and re-imports finished products made from these at high cost.

“It is partly due to this that in 2013, the 19-member Comesa group recorded a US$6 billion trade deficit, importing goods worth US$41 billion against exports of US$35 billion,” Bimha told journalists at the 18th Common Market for Eastern and Southern Africa (Comesa) Heads of State and Government Summit recently.

He went on to say: “Trading among ourselves (in Comesa) is still low. Our productive sector is not competitive, we are producing the same products and we compete for (the same) markets. What we need to do is diversify, which relates to issues of beneficiation and value addition.”

The executive secretary of the United Nations Economic Commission for Africa (UNECA), Carlos Lopes, in addition pointed out that it is sad that Africa is only contributing less than 20 percent to the industrial sector.

“This reality challenges us to think creatively. The abundant natural resources that we have in Africa should be utilised to the fullest.

“It is the only way to go for Africa’s economic transformation. This, however, can only be done through collective action,” he said.

President Robert Mugabe, who is also the chairman of the Southern African Development Community (SADC) and the African Union (AU), is at all times against exporting Africa’s resources in their raw form, and consistently pushes for inclusive sustainable industrialisation.

The Zimbabwean leader is also on record saying an all-encompassing sustainable industrialisation is paramount to Africa if the continent is to beneficiate and add value to its assortment of natural resources as well as to maximise export earnings.

Comesa secretary general, Sindiso Ngwenya, subscribed to President Mugabe’s impression and emphasised the need for African countries to work together and concentrate on promoting investment and industrialisation for the continent to be fully developed.

“Industrialisation is key to the economic transformation of the African continent; therefore, African states should work together for the realisation of social and economic development,” he also said during the Comesa summit.

Minister Bimha concurs.

“For Africa to go forward, we need to industrialise. There is no way we can continue to export raw materials.

“We cannot continue to rely on other people converting or adding value to what we produce and in turn sell the same to us at exorbitant prices. That time is way behind us,” he said.

African Union Commission chairperson, Dr Nkosazana Dlamini-Zuma is also of the view that the time is now for Africa to unite and develop itself.

“This is a rallying call for the coming generation. We have to shift our focus from aspirations to implementation. We must come up with strategies that will make Africa rise and be a better continent,” she said.

She added: “It is important to know what skills Africa needs, what capacities we have or lack and also make use of the diaspora in industrialising our continent and utilising the abundant resources we have,” Dr Dlamini-Zuma said.

To embrace inclusive sustainable industrialisation, Ngwenya strongly believes the continent needs to fund its industrial initiatives and promote its own investments.

Sharing same views, the African Development Bank (AfDB) Vice President and Special Envoy on Gender, Geraldine Joslyn Fraser-Moleketi said: “To promote inclusive and sustainable industrialisation, the continent needs, first of all, to fund its own industrialisation process and to pursue innovative ways to mobilise domestic resources to finance its industrialisation and development in general.”

Minister Bimha also advised, “We cannot continue to rely on foreign direct investment, we have to look at innovative ways of raising funds on our own, utilising our own resources.”

This, therefore, means African financial institutions along with the private sector must play big roles in pushing the industrialisation agenda by supporting government and other development institutions especially in areas of infrastructure development.

“For the industrialisation drive to succeed, Africa needed to urgently attend to its infrastructure deficit areas, including power, transport and communication. The private sector should take the lead in investing in infrastructure, with governments largely playing a facilitative role,” noted Bimha.

He added, “The private sector must be given the chance to participate in formulation of strategies, and leeway to implement them.”

Ngwenya also agreed that industrialisation requires both comprehensive and calculated alliance between public and private sectors.

“It is important for us to improve the quality of the business environment and strengthen economic policy co-ordination at national and regional levels.

“Successful implementation of the common industrial policy requires not only sound macro-economic policies, but also micro economic policies,” asserted Ngwenya.

Cognisant of the fact that a healthy and growing African private sector is key to industrialisation and inclusive growth, the African Development Bank is supporting the creation of an enabling business climate, and supporting enterprise development including through long-term debt, equity, guarantees, loan syndications and underwriting.

African countries must simply take advantage of this and other opportunities if they are to transform economically.

They must also support small to medium-scale enterprises (SMEs) as they are driving forces behind many African economies.

“Inclusion of SMEs in the industrialisation strategy is of paramount importance,” said Bimha.

However, out-going Comesa chairperson, Democratic Republic of Congo (DRC) President Joseph Kabila, believes political will is required if the continent is to realise its industrialisation dream – a prerequisite to Africa’s socio-economic growth.

Fraser-Moleketi, accordingly, summed it up: “Inclusive sustainable industrialisation is a necessity for Africa’s transformation, and intra-regional trade is stronger with value-added products.

“For that reason, let us join hands to push Africa’s transformation agenda to realise the continent’s potential as the world’s new growth pole.”

Zimbabwe hosts a SADC industrialisation summit in Harare at the end of this month at which the region is expected to chart its industrialisation path.

COMESA has drafted an industrialisation policy to guide the region towards self-sustained growth and improve competitiveness in the bloc.

The policy is meant to promote manufacturing through agro processing, leather products, cotton and garments, mineral development, light engineering and pharmaceuticals. Some countries such as Zimbabwe and Zambia belong to both the SADC and COMESA blocs.