Industrialisation, value-chain expansion key to economic development

Despite unprecedented growth many African countries recorded in the past decade, the Executive Secretary, United Nations Economic Commission for Africa (UNECA), Carlos Lopes has emphasised the need for the continent to focus on the potential offered by industrialisation to transform their economies.

Specifically, Lopes said that the continent should industrialize through the expansion of commodities value chains, by positioning agro-business to act as the pull factor for agricultural to get out of the doldrums.

According to Lopes, the type of structural transformation needed is not only as a shift from a simple reallocation of economic activity across three broad sectors (agriculture, industry and services) that accompanies the process of modern economic growth but also as all that encompass issues of sustainability and inclusiveness.

Indeed, the 2016 edition of the International Yearbook of Industrial Statistics by the United Nations thierIndustrial Development Organisation (UNIDO) showed that global manufacturing production rose by just 2.8 per cent in 2015 as developing and emerging industrial economies registered reduced growth rates.

“We need to look at the industrialization as a multi-faceted way. It is not just producing the manufactured goods. It is about transforming the society’s structural production into much high gear”, he said.

On the kind of industrialization Africa needs, Lopes said that “it is the one that is specific to our African conditions and that must be linked to agricultural transformation.

“Because our agriculture has the lowest productivity in the world, the only way we are going to be able to catch up with productivity is by linking it to agro processing. Not living it alone, but adding value to the chain”.

Lopes explained that because Africa has a huge population growth that comes with a huge middle class growth there is a huge demand for processing food.

“Africa imports 83 per cent of its processed food from yoghourt to cheese to beef to chicken. Everything that is processed we are importing in a big number. If we industrialize part of agricultural outputs, we are satisfying our internal market and we are creating possibilities of increasing productivity. That is the link of structural transformation”, he said.