UNIDO canvasses continental integration for trade, industrialisation

To enhance growth of intra-African trade and industrialisation within the continent, the United Nations Industrial Development Organisation (UNIDO), is pushing for support and implementation of continental economic integration.

According to UNIDO, African Continental Free Trade Area (AfCFTA), provides a chance for African countries to move away from resource-dependence and transform into dynamically diversified economies and competitive industrial production locations.

Preparatory to the Third Industrial Development Decade for Africa (IDDA III), UNIDO Director-General, LI Yong, noted that for the benefits of economic growth to be shared by all, there needs to be a structural transformation of the economy, with reference to composition such that there are increased shares of manufacturing and agro-related industry in national investment, output, and trade.

Yong explained that manufacturing has always been one of the most important drivers of economic development and structural change, especially in developing countries as a result of its multiplier effect on other sectors of the economy,

“Manufacturing is an engine of growth that enhances higher levels of productivity and greater technical change, thus creating more jobs with higher wages for both women and men”, he added.

Making a case for the AfCFTA, Yong said: “Industrialization, diversification and job creation in Africa, however, cannot happen without continental economic integration. The recent signing of the historic agreement for an African Continental Free Trade Area (AfCFTA) by 49 out of 55 countries creates an opportunity for inclusive and sustainable economic development, moving away from structural stagnation and commodity-based economics. The AfCFTA agreement will create the world’s largest single, integrated market for goods and services, and a customs union that will enable free movement of capital and business travellers in Africa.

“Higher trade among African countries will also strengthen African regional value chains, making it easier for local small and medium-sized enterprises, which account for around 80 per cent of Africa’s businesses, to build competitiveness, supply inputs to larger regional companies, and participate in and upgrade to global value chains.

“By taking bold actions in advancing the agenda of the AfCFTA, using it as one of the best means of promoting industrialisation, African countries are well-positioned to build an Africa that can become a strong link in today’s interdependent global economy.

“Structural transformation, however, is never automatic. Political goodwill and commitments are a first important step; but a multi-pronged, action-based approach with partnerships at the heart, along with concrete industrial policies, is needed for this to become a reality.

“That is why UNIDO has developed an innovative country-owned, multi-stakeholder partnership model to provide governments with a platform to bring together various stakeholders, including development finance institutions and the private sector, to mobilize large-scale resources, accelerate industrialisation and achieve a greater development impact”.

Placed under the theme, “Enhancing global partnerships for IDDA III – Key for successful implementation of the African Continental Free Trade Area (AfCFTA)”, the IDDA III, which will be held in New York on the margins of the 73rd Session of the United Nations General Assembly, is organized by UNIDO together with the African Union Commission (AUC), the African Development Bank (AfDB), the United Nations Economic Commission for Africa (UNECA), and the Food and Agriculture Organization of the United Nations (FAO).

Indeed, the interactive discussions are designed around two themes: “Ushering in a new era of intra-African trade: Challenges and opportunities for African industrial growth” and “Strengthening the involvement of the international community in African industrialization following the launch of the AfCFTA”.