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Africa is considering new models of industrialization

” L’African economy remains under-industrialized, and Africa exports raw materials with very little added value, while it imports manufactured products with high added values, explained Nigerien President Mohamed Bazoum. We must therefore steer the industrialization process, adopting a robust strategy with no regrets. » The challenges of Africa’s industrialization were widely discussed during an extraordinary double summit of the African Union (AU) on African industrialization and economic diversification and that on the African Continental Free Trade Area (Zlécaf), organized over several days in Niamey, the capital of Niger.

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Encouraging indicators

The subject of industrialization is not new, and one day, November 20, was even established by the United Nations in 1989. It is in this context that the double summit of the African Union was held. Africa exports almost everything without manufacturing locally, yet in recent years, African states have become aware that African growth must be based on diversified sectors other than raw materials. But what is the concrete situation today? What do the numbers say? To get a clearer picture of the debate, dive into the latest report on the Africa Industrialization Index (AII), from the African Development Bank and the United Nations Industrial Development Organization (UNIDO). ). According to this index, thirty-seven African countries out of fifty-two have seen their level of industrialization increase over the past eleven years.

Also, the document provides a nationwide assessment of progress made by states based on 19 key indicators that cover manufacturing performance, capital, labor, business environment, infrastructure and macroeconomic stability. Result: South Africa maintained a very high ranking throughout the period 2010-2021, followed closely by Morocco, which occupied the second place in 2022. Egypt, Tunisia, Mauritius and Eswatini complete the top six over the period. It should be noted that despite the successive global crises in 54 countries, 7 African countries concentrate more than 65% of real GDP on the continent, including Nigeria, South Africa, Egypt, Algeria, Morocco, Kenya and Ethiopia.

However, Abdu Mukhtar, Director of Industry and Trade Development at the AfDB, noted that while Africa has made encouraging progress in industrialization during the period 2010-2022, the Covid-19 pandemic 19 and Russia’s invasion of Ukraine hampered its efforts and exposed shortcomings in production systems. “The continent has a unique opportunity to address this dependency by further deepening its integration and conquering its own emerging markets. According to the expert, “the African Continental Free Trade Area represents a unique opportunity to create a single market of 1.3 billion people and generate cumulative consumer and business spending of up to 4 trillion dollars. dollars, which offers the possibility of strengthening their trade and production links and finally benefiting from the industrial competitiveness of regional integration, as other regions have done,” he added. Concretely, on paper, the project has been effective since the beginning of this year. But its reality is more mixed on the ground, we are still far from lifting or reducing customs tariffs.

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Put an end to the paradoxes

And the continent is starting from afar, Africa’s share of global manufacturing has fallen in recent years to less than 2%. The Nigerien president to drive the point home, according to him, the share of trade between African countries does not exceed 17%. In sub-Saharan Africa, it is the share of manufacturing industry in GDP that has fallen, from 13% in 2000 to 10% in 2017. With examples, the Nigerien head of state did not hesitated to highlight the weak points of the continent: “Do you know that in my country Niger, which has one of the largest herds in Africa, we import milk from France and Holland? That our immediate neighbors import meat from Argentina and New Zealand? These facts, as amazing as they are, are a false paradox. This economy, which by the principle of communicating vessels generates added value far from Africa, generates few local jobs, and harms local production, and therefore the industrialization of our countries,” he said. to illustrate his point.

There is therefore an urgent need, according to him and his other African counterparts and officials, to implement more proactive industrial policies, even if this requires in-depth knowledge and a detailed understanding of the constraints and opportunities that each country faces. “Today, we must identify the factors that have hampered Africa’s development and rethink the models,” insisted the President of the African Union Commission, Moussa Faki, convinced like the other participants that the creation of value added through manufacturing is greater than the size of the economy.

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Initiatives around specific value chains

This is confirmed by the ADB report, which noted progress in many countries in their industrial development, such as Djibouti, Benin, Mozambique, Senegal, Ethiopia, Guinea, Rwanda, Tanzania, Ghana and Uganda. Their particularities? These countries have all moved up five places or more in the rankings over the period 2010-2019. “The best performing countries are not necessarily those with the largest economy, but those that generate the highest manufacturing value added per capita, with a significant proportion of manufactured goods destined for export. North Africa remains the most advanced African region in terms of industrial development, followed by Southern Africa, Central Africa, West Africa and East Africa, which focused on pharmaceuticals,” say the authors.

Some countries, including Ethiopia, Rwanda and Morocco, have established networks of industrial parks and special economic zones (SEZs), and are taking other measures to promote SME development. And these actions are already yielding significant results, in Ethiopia manufacturing value added quadrupled between 2010 and 2019, reaching nearly $5 billion.

Niger, a landlocked country, located at the 39e place in the index of industrialization, is also in the race for industrial development, in particular thanks to the domestic demand for manufactured goods. It is estimated that Africa could increase its manufacturing output by $322 billion by 2025, just by meeting growing domestic demand, especially for food, beverages and their processed products. Many African countries are now prioritizing industrial sectors through specific value chains with strong local demand to reduce their dependence on imports. Especially since Africa has a considerable asset: the continent’s population could increase from 1.2 billion people today to 2.5 billion in 2050, ie the largest consumer market in the world.

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