Countries with diverse economies, advanced technology industries, and reliable infrastructure, including efficient transportation and utility services, as well as dependable internet connections, are recovering more quickly from the impact of the COVID-19 pandemic.
The recent Russia-Ukraine conflict has also had significant consequences, causing sudden price hikes in energy and commodities and disrupting global supply chains. This unfortunate situation has once again highlighted the continent’s vulnerability, even as it is trying to recover from the COVID-19 crisis.
The latest Africa Development report(2022) on regional industrialisation presents a rather concerning observation – Africa’s contribution to the global manufacturing output has experienced a significant decline, plummeting to less than two percent in recent decades. This statistic raises important questions about the factors contributing to this decline and highlights the need for strategic interventions to revitalise Africa’s manufacturing sector.
Although there has been a notable rebound in global manufacturing, it is important to acknowledge that the recovery in developing countries has been far from smooth.
While some regions have experienced a relatively swift resurgence, others have struggled to regain momentum, leading to an imbalanced picture of progress on a global scale. This disparity highlights the complex challenges developing nations face as they navigate economic recovery and the need for targeted support and initiatives to ensure that all growth is inclusive and sustainable.
This uneven recovery among less developed UN-affiliated nations highlights the importance of technological innovation for realising the United Nations Sustainable Development Goal 9: Build resilient infrastructure, promote sustainable industrialisation and foster innovation.
According to the United Nations Sustainable Development Report (2022), “higher-technology manufacturing industries fared better than lower-tech industries during the pandemic, and therefore recovered faster.”
The Report also highlights the following:
- Most industries using medium and high technology – such as computers, electronics and pharmaceuticals – have already returned to pre-pandemic production levels, except for motor vehicle and other transport equipment manufacturing.
- Lower-tech industries, such as textiles and clothing, or coke and refined petroleum products, remain below their pre-pandemic levels.
- The manufacture of basic consumer goods, such as food products, has seen a stable growth trajectory since the pandemic, with limited losses.
- According to their most recent statistics, the manufacturing sector in Europe and Northern America was predominantly composed of medium- and high-tech manufacturing in 2019, accounting for 47.7percent of the total manufacturing output. However, this percentage was significantly lower in sub-Saharan Africa, standing at only 21.4percent. Furthermore, in the least developed countries, the proportion of medium- and high-tech manufacturing was even lower at just 10.5percent.
These figures highlight the significant disparity in different regions’ manufacturing capabilities and the need for greater investment in developing advanced manufacturing technologies in underdeveloped regions to promote sustainable economic growth. SDG 9 aims to build resilient infrastructure, promote sustainable industrialisation and foster innovation. Targets for this goal include:
- Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, focusing on affordable and equitable access for all.
- Promote inclusive and sustainable industrialisation and, by 2030, significantly raise industry’s share of employment and gross domestic product in line with national circumstances and double its share in least developed countries.
- Increase the access of small-scale industrial and other enterprises, particularly in developing countries, to financial services, including affordable credit, and their integration into value chains and markets.
- By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action per their respective capabilities.
- Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries, including, by 2030, encouraging innovation and substantially increasing the number of research and development workers per 1 million people and public and private research and development spending.
- Facilitate sustainable and resilient infrastructure development in developing countries through enhanced financial, technological and technical support to African countries, least developed countries, landlocked developing countries and small island developing States.
- Support domestic technology development, research and innovation in developing countries, including by ensuring a conducive policy environment for, among other things, industrial diversification and value addition to commodities.
- Significantly increase access to information and communications technology and strive to provide universal and affordable access to the Internet in least developed countries by 2020
According to the United Nations Sustainable Development Report (2022), “after dropping 1.3 per cent in 2020, global manufacturing production grew by 7.2 per cent in 2021, surpassing its pre-pandemic level, but recovery remains uneven among countries.”
In high-income countries, recovery was quick primarily due to strong policy support. In comparison, recovery in developing nations “has been sluggish, due to subdued and volatile global demand, global trade disruption and tighter domestic economic policies.”
Although recovery has been strong in some areas, extended lockdowns and bans on travel have meant that jobs in manufacturing have struggled to regain the ground lost during the pandemic. “Nearly one in three jobs in manufacturing supply chains worldwide have likely been terminated, seen a reduction in working hours or pay, or been the target of other cutbacks” (UN, 2022).
Small-scale industries, especially those with limited or no access to credit or government support, have been hit particularly hard. “Only 15.7 per cent of small-scale industries in Africa received those forms of credit, compared with 44.2 percent in Latin America and the Caribbean. Due to their scale, limited financial resources and greater dependency on supply chains, these industries are more vulnerable to economic downturns than their larger-scale counterparts,” the Report highlights. The UN Report further highlighted.
Selected African countries have seen impressive economic growth, but many still face significant industrial challenges. South Africa is an exception. It is an example of successful industrial development on the continent. Other African nations have the potential to follow suit and overcome their obstacles by utilising their natural resources, investing in infrastructure, promoting innovation, and establishing favourable business environments.
The COVID-19 pandemic has caused major disruptions to global trade, impacting both the demand and supply sides. This crisis is a powerful reminder of the risks associated with relying too heavily on external suppliers and markets in Africa.
According to Angela Lusigi, UNDP Resident Representative in Ghana, “By advancing actions to achieve Sustainable Development Goal 9, African countries can adopt sustainable industrialisation, innovation and infrastructure to generate employment and income, promote new technologies, facilitate international trade and enable efficient use of resources” (2022).
For Ghana and the rest of the continent to attain sustainable industrialisation, it is imperative that their leaders fully embrace technological innovation and digitisation. These cutting-edge advancements will undoubtedly be a crucial catalyst for driving progress and ensuring long-term prosperity and success.
With the integration of advanced technologies and digital platforms, African nations will be able to streamline their operations, optimise their resources, and ultimately achieve both industrial and economic growth that is both sustainable and inclusive. This will undoubtedly provide numerous benefits, such as improved efficiency, increased productivity, and enhanced economic growth.
As Lusigi suggests, “By using digital technologies in manufacturing, African countries can create more productive jobs, boost manufacturing and leverage the African Continental Free Trade Area (AfCFTA) with its approximately 1.2 billion consumers” (2022).
>>>The writer is an international chartered director and Africa’s first-ever appointed Professor Extraordinaire for Industrialisation and Supply Chain Governance. He is the CEO of PanAvest International and the founding non-executive chairman of MY-future YOUR-Future and OUR-Future (“MYO”) and the “thought-provoking” daily NyansaKasa (words of wisdom) series. Professor Boateng is the non-executive chairperson of the Minerals Income and Investment Fund (MIIF). Previously, he was the non-executive chair of the Public Procurement Authority (PPA). For more information on Nyansakasa, visit www.myoglobal.org and www.panavest.com.
