Funding key to SADC’s industrialisation

Lazarus Sauti

The Southern African Development Community (SADC) is gifted with rich natural resources, but about 70 per cent of its citizens continue to live in poverty.

“Our region is endowed with abundant and diverse natural resources. Just to illustrate this point, our mineral sector alone contributes to world production about 6 per cent of coal, 7 per cent of nickel, 8 per cent of copper, 13 per cent of uranium, 15 per cent of manganese, 18 per cent of cobalt, 21 per cent of zinc, 26 per cent of gold, 42 per cent of chromite, 55 per cent of diamonds and 72 per cent of the platinum group of metals.

“But alas, despite the rich and diverse endowments of our region, about 70 per cent of our people continue to live below the poverty datum line,” said SADC chairperson President Robert Mugabe.

The problem is that SADC countries are exporting their natural resources in their raw form and expensively importing consumer goods.

“SADC remains a source of unprocessed products, a trend which should be reversed in the region is to achieve self reliance and avoid being entrapped in the jaws of consumers of high priced products,” said President Mugabe.

However, to reverse the collapse of the productive sector and plug an invasion of cheap imported products, the SADC Extraordinary Summit adopted the region’s Industrialisation Strategy and Roadmap anchored on competitiveness and regional integration to be implemented over three phases covering 2015 to 2063.

To sustain the industrialisation strategy and roadmap, President Mugabe believes the region’s future lies in its ability to generate its own financing to develop the industry needed to promote social and economic transformation.

He, therefore, urged the regional grouping to work out effective financial mechanisms to fund the regional industrialisation strategy.

Officially opening the SADC Extraordinary summit in Harare recently, President Mugabe said since member-states are own liberators from colonial bondage, they must find the resources to free themselves from economic oppression.

“The SADC region must work out effective financial mechanisms to fund the regional industrialisation strategy as well as roadmap.

“We cannot expect those who benefit from our status as exporters of raw materials to fund our efforts to wean ourselves from this unequal relationship, a relationship in which they have the prerogative of dictating the terms of trade.

“Just as we are our own liberators from the colonial bondage and oppression, we have to find the resources to free ourselves from economic bondage,” he said.

Happison Zvenyika, a Harare-based economist as well as financial analyst, believes countries within SADC have the resource base to support the expansion of viable domestic finance instruments.

He, therefore, urges member states to utilise these domestic resources for industrialisation finance.

“To support the industrialisation drive, funding is of paramount importance. Although the funding gap in the region can be huge, member-states can comfortably draw resources from domestic sources such as pension funds, diaspora remittances over and above earnings from rich minerals such as platinum, diamonds, gold, copper, uranium and nickel,” he said.

Zvenyika also said public financing alone is not enough to support the implementation of the industrialisation strategy.

“Public financing, the collection of tax from people who benefit from the provision of public goods by the government and the use of those tax funds towards production of goods, is not enough to support the funding of industrialisation.

“Therefore, policy decision makers in the region must entice support from private sectors to provide additional finance it the region is to realise its goal of alleviating poverty,” he said.

Further, to enhance the effectiveness of the industrialisation roadmap, government sectors must be committed to enact laws designed to attract private investments to industrialisation projects as well as to harmonise regional rules and regulations.

“It is the mandate of governments to lure private sector players to support projects of national interest. To entice them, governments must create conducive environments by enacting strategies and policies that benefit both governments and private investors,” he added.

Chairperson of the Council of Ministers and Zimbabwe Foreign Minister, Simbarashe Mumbengegwi also said the industrial strategy’s success will depend on partnerships between governments and private sectors.

According to the SADC communiqué, the industrial strategy is aligned to the continental vision, Agenda 2063, a pro-people strategy aimed at optimising the use of Africa’s resources for the benefit of Africans, and its identified priorities include improving agricultural production and productivity, infrastructure development, peace and security, as well as trade and industrialisation.