Industrialising Africa: Renewed commitment toward an inclusive and sustainable industrialisation and economic diversification

(AfCFTA) agreement

Under the African Union’s auspices from November 20 to 25, government representatives and corporate industrialists as well as agricultural experts plan to discuss and re-examine strategic mechanisms for improving two key sectors, and interconnection between the economy and industry in Africa.

The gathering, after critical in-depth discussions, seeks to design new action plans on industrialising Africa; add value to the continent’s agricultural products; and look at possible ways to strengthen and diversify the economy. While this might not be an easy task, it is however about time that African leaders made serious and conscious efforts to transform resources for building infrastructure, and work toward developing a sustainable economy.

With this background, the African Union fixed this summit’s theme as ‘Industrialising Africa: Renewed commitment toward an Inclusive and Sustainable Industrialisation and Economic Diversification’, reflecting the practical task ahead for all African leaders.

Given the importance of industrialisation and economic transformation in Africa, the 20th of every November is commemorated as Africa Industrialisation Day, which was adopted by the Assembly of Heads of State and Government of the Organisation of African Unity in July 1989 at Addis Ababa, Ethiopia.

Africa Industrialisation Day provides an opportunity for key stakeholders to reflect on Africa’s industrialisation by looking at how the continent can change its current status quo. Since 2018 Africa Industrialisation Day has been commemorated with week-long events, marking a departure from the one-day tradition and affording more time to reflect and accelerate actions toward Africa’s structural transformation, as an enabler to meet the objectives of Agenda 2063 and Sustainable Development Goals 2030.

Trading under the African Continental Free Trade Area (AfCFTA) agreement was also launched on 1st January 2021, which makes it paramount for African leaders to address contradictions and complexities in the development paradigms and critically focus on economic sectors with their external partners. Building an integrated economy for Africa is a common goal.

In close interconnection with this, experts have emphasised that steps must necessarily fall within the ideals of realising the primary aim of creating a single continental market. Understandably, the AfCFTA – created as a single African market for goods and services – covers an estimated 1.3 billion people with a combined GDP of over US$3.5trillion across 55 member-states.

Thus, Africa’s industrialisation and transformation agenda needs to be supported at the highest national, regional, continental and global levels. The focus is to accelerate efforts in a select number of key policy areas – such as energy and road infrastructure, trade facilitation, financial sector development, education development, agro-industrial transformation, green industrialization, and technological innovation and transformation.

Advancing the AfCFTA and Africa-Industrialisation side-by-side with deliberate efforts to realise the mutually-reinforcing interdependences between the two will provide Africa’s critical success-pillars and conditions for Agenda 2063.

More fundamentally, there are still many questions for a number of African leaders: including their system of governance and poor state management combined with weak development policies and strategies which have openly exposed the hollowness of African economies on several fronts, including the fragility and weakness of Africa’s industrial capabilities. There is a need to change the development narratives toward the prioritisation of initiatives intended to accelerate Africa’s industrialisation.

The continent’s industrialisation prospects are anchored on unleashing the growth of small and micro-enterprises – guided by the African Union SMEs Strategy, whose development was informed by evidence-based mapping of the continent’s production systems’ peculiarities. By creating business-enabling conditions using available opportunities and possibilities across the entire continent, we can enhance the longevity rate of Micro, Small and Medium-Sized Enterprises (MSMEs).

While the continent’s industrial policy landscape stretches back to the 1980s, from the First Industrial Decade for Africa all the way to the Accelerated Industrial Development of Africa (AIDA, 2008) – and globally the United Nations General Assembly (UNGA) has further magnified the significance of Africa’s industrialisation through the adoption of a resolution in July 2016 that dedicated the period 2016-2025 to the Third Industrial Development Decade for Africa (IDDA III), the performance has remained rather mixed.

Under the circumstances, development challenges currently confronting the continent therefore necessitate effective, efficient and timely deployment of action beyond political rhetoric for any meaningful impact on delivering sustainable human development on the continent in the medium- to long-term.

It is encouraging to note that IDDA III presents yet another opportunity to rally global partnerships and efforts to work as a collective on driving structural transformation in Africa. As such, this endeavour should be optimally leveraged for any meaningful impact on delivering a sustainable and inclusive industrialisation pathway for Africa.

What’s critical for Africa at the moment is to acknowledge the need to chart a revived focus toward a rejuvenated Pan-African industrialisation agenda and framework, informed by lessons learnt thus far from previous programmes and taking full cognisance of the current and evolving social, economic and political trends, and developmental needs of the continent.

The continent’s capacity to deliver on Agenda 2063 hinges on industrialisation. To buttress this, the UN SDGs have assigned Goal 9 toward building industries and resilient infrastructure as a way of strengthening developing economies’ capacity to address structural challenges and poverty alleviation.

In addition, the IDDA III should be flexible enough to consider Africa’s industrialisation within the context of uncertainties such as present geopolitical changes in the world. Going forward, Africa’s industrialisation agenda must unequivocally incorporate industries which prove to be resilient in the face of uncertainties, and recovery-ready within the shortest possible time when industries are hard hit.

On the other hand, industrialisation should not be perceived as a single pathway for sustainable development in Africa. Rather, industrialisation – with strong multi-sectoral and multi-directional linkages to domestic economies – will help African countries to achieve higher economic growth rates and economic diversification. Success in industrialisation will be at the core of efforts to address key structural economic growth and development weaknesses and fragilities – from poverty and inequality through to inadequately developed education, health, housing and sanitation services.

Seeing beyond the current challenges requires policymakers to tackle head-on other supply-side structural bottlenecks and barriers, such as energy and infrastructure, for enhanced enterprise competitiveness. This also places due pressure on policymakers to improve business and regulatory regimes to enhance private capital flows, absorption and adaptation of technology, artificial intelligence and skills transfer to unleash private sector growth.

Furthermore, sustainable success on Africa’s industrialisation front will only be achieved with deliberate efforts to integrate and systematically address its underlying development features: such as micro- small- and medium enterprises and the informal economy; the urban-rural transition; socio-economic diversity across the 55-member African Union; as well as linkages between education, skills-development and industry. Cross-cutting issues such as gender, climate change, energy security, youth population and growing unemployment must be considered to facilitate the evolution of a sustainable and inclusive industrialisation pathway for the continent.

Africa has a lot to learn from its own experiences with industrialisation over the past several decades as well as other parts of the world. However, what’s abundantly clear is that industrialisation successes in Europe and the Americas – and more recently in Asia – cannot be fully replicated in Africa. Apart from just that, Africa has its own unique circumstances; and many of the factors that propelled industrial success on other continents no longer exist. That’s why advancing Africa’s industrialisation has to take deliberate consideration of what can and should work for Africa while ensuing interdependencies with the rest of the world in those areas that can amplify the continent’s benefits.

It is important to emphasise here that there are partnerships and alliances to deliver on Africa’s industrialisation: these include rallying domestic and international public-private partnerships for enhanced planning and implementation capabilities for accelerated/expanded industrial growth in Africa.

It depends on multi-/cross-sectorial approaches as key conditions for success: aligning key cross-sector conditions and policies for success; energy security, institutions, polities and legislation; human capital, skills and intellectual capacity; environmental resilience and climate change (green industries).

It is worth reiterating here that African leaders have to take into consideration the youth and women-led MSMEs in driving the success of Africa’s industrialisation, special cross-cutting drivers for sustainable success: youth, micro-, small- and medium enterprises, women, competitiveness and urban-rural transitions.

There is also resource governance and leveraging financial and non-financial resources into Africa’s industrialisation: de-risking Africa’s industrialisation; catalysing domestic and international investments; technology transfer and local innovations to leapfrog Africa’s industrial growth. Besides those discussed above, another aspect is indigenous knowledge and Africa’s industrialisation – which means protecting African indigenous knowledge with intellectual property rights and integrating it into Africa’s industrialisation.

In light of the key and strategic interdependencies between industrialisation and the African Continental Free Trade Area Agreement (AfCFTA), the summit aims to rally desired political momentum, resources, partnerships and alliances toward an African industrialisation drive. This is along the continental resolve to drive structural transformation, built around leveraging Africa’s rich and diverse natural resources while at the same time embracing current advances in technologies, continental and global geo-political trends and the emergence of tradable services.

Transformation is anticipated to unlock the evolution of a vibrant Pan-African enterprise and capital base that will unleash an inclusive and sustainable industrialisation pathway that carries along the participation of all economic agents – including SMEs, youth and women – in the generation of national wealth and creation of jobs, as well as an expansion of entrepreneurship opportunities for Africa’s 1.3 billion population.

While this November’s summit aims at highlighting Africa’s renewed determination and commitment to industrialisation, it simultaneously aims at renewing the expectation for Africa to take a great leap forward from its industrial stagnation. And the summit offers a platform for making joint decisions: it finally presents as one of the pillars or cornerstones in addressing the continent’s economic growth and sustainable development goals, as articulated in Agenda 2063 and Agenda 2030.

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