At the end of their four-day deliberations, African leaders and participants have issued a joint statement relating to the future of economic diversification and industrialisation in Africa. The summit provided the opportunity to take stock of the progress made during the year on the drive toward industrialisation. It also provided a policy dialogue platform to firmly recommit to accelerating structural transformation.
Convening in Niamey, Niger for the Extraordinary Summit on Economic Diversification and Industrialisation, the ministers and participants collectively, in a report, suggested that key policies and regional integration issues should be drastically addressed to support industrialisation in Africa, reminding further that Africa is widely seen as a future investment and development frontier given its extraordinary economic potential in Africa.
It was, however, acknowledged that it was held at the backdrop of a completely uncertain global landscape owing to the prolonged effects of the coronavirus pandemic, the pressing challenges posed by climate change, and the Russia-Ukraine conflict which have disrupted the global supply chains with huge consequences globally, and more fundamentally on African economies.
According to the summit reports, these circumstances have revealed the extreme fragility of African economies against external shocks, and reinforced a need for structural changes necessary for the acceleration of productive transformation through a determined shift toward sustainable and resilient industrialisation in the years and decades ahead.
The summit highlighted the role governments and other non-government actors play in addressing the constraints to industrial development; strategies for countries to re-invigorate the role of development finance institutions to promote industrial financing while drawing lessons from existing challenges; strategies for the countries to deal with global issues, such as climate change, in their efforts to industrialise; and reflected on the experience of industrial policy, design, implementation and monitoring for its new industrial strategies.
Ms. Aissata Tall Sall, Minister of Foreign Affairs and Senegalese Abroad and the current Chairperson the Executive Council, underscored the critical role of the private sector in supporting innovation in high-potential areas, such as agriculture, agro-industry, health, education, infrastructure, and especially, energy which remains a crucial issue in advancing industrialisation.
She observed that: “This decision has a high strategic significance because the aim of the industrialisation and productive transformation process in our countries is to improve their capacity to take advantage of the many human and natural resources which the continent has to offer. Indeed, the industrialisation of Africa can unlock the continent’s potential for inclusive growth by expanding access to the economic opportunities thus created to all segments of the population, especially women and youths. In addition to these challenges, all of which are important, there is the issue of mobilising domestic resources to finance our economies as well as the fight against illicit financial flows that encourage tax evasion and corruption”.
Massoudou Hassoumi, Niger’s Minister of Foreign Affairs and Cooperation, emphasised on the urgency for inclusive industrialisation that harnesses the demographic divide of the youth, which he noted would also sustainably address issues of irregular migration, manipulation and recruitment into out-lawed groups.
He added that: “Industrialisation and economic diversification are, therefore, a lasting economic legacy that we must leave to the younger generation because it is a solution to the challenges of the moment, especially those related to insecurity. In this regard, it is important to reiterate the African position for a fair and equitable transition to defend the right of our countries to exploit the available resources such as gas, alongside their efforts to develop the energy mix”.
To accelerate the progress made in operationalising the African Continental Free Trade Area, Moussa Faki Mahamat, Chairperson of the African Union Commission, restated the need to conclusively address the structural challenges that hinder the optimal functioning of the common market.
“The major challenge here is to be able to strengthen trade between African countries that are more open to the outside world through agreements that have already been signed and that manage the bulk of their trade. It is, therefore, a matter of developing the capacity to successfully transform our productive structures with a view to increasing the complementarity of intra-African trade. It would also be necessary to ensure convergence by reducing the major gaps between member-states and between the regional economic communities in terms of development and level of integration. The AU Commission’s State of Integration in Africa 2022 Report has highlighted the reality of such gaps,” according to Moussa Faki Mahamat.
Africa possesses 60 percent solar irradiation in the world, 70 percent of cobalt global production and significant reserves of other battery minerals, world-class carbon sink assets in our forests and peatlands, huge green hydrogen potential which Antonio Pedro, UNECA Acting Executive Secretary, noted can position the continent to become a powerhouse and a globally competitive investment destination for multi-sectoral investments combining climate action, job creation and industrialisation.
“As we drive industrialisation, we also need to realise that industrialisation is not an event, but it is a process, and a long one at that. And, of course, we should be mindful that industrialisation is not the business of Ministries of Industry alone. Instead, the implementation of true industrial policy requires a whole of government and beyond approach and action. It requires aligning industrial, trade and other sectoral policies and putting science, technology and innovation at the centre to ensure that we remain globally competitive beyond our initial endowments and comparative advantages,” noted Antonio Pedro.
To rally the support of the private sector, Dr. Amany Asfour started the commitment by the AfroChampions Initiative to mobilise the private sector to enhance the public-private partnership as the continent moves from commitment to action on industrialisation and trade. Empowering the private sector through market-based solutions and resolving finance barriers remains critical.
Among the recommendations of the ministers was the appointment of the African Union Champion for Sustainable Industrialisation and Productive Transformation to provide political leadership and awareness, and ensure effective implementation of Africa’s industrial development. Further considering endemic factors which have stifled Africa’s economic transformation, it is important to reassess the continent’s capabilities in the face of external shocks.
In this regard, it is important for the African Union members to set up innovative and inclusive institutions capable of designing and implementing effective industrial policies and processes which will advance socio-economic transformation as stipulated in global and continental frameworks such as the African Union Agenda 2063, the United Nations Sustainable Development Goals, and the Third Industrial Development Decade for Africa.
