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‘AfCFTA agreement alone cannot guarantee African industrialisation’

By Femi Adekoya
23 November 2022   |   4:33 am
As Nigeria and other African countries commemorate this year’s industrialisation day, stakeholders within the continent have emphasised the need for an improved business and investment environment

AfCFTA

As Nigeria and other African countries commemorate this year’s industrialisation day, stakeholders within the continent have emphasised the need for an improved business and investment environment, as well as the need to put African priorities at the centre of international negotiations if the continent will achieve its industrialization agenda.

Though the African Continental Free Trade Area (AfCFTA) gives Africa the unique opportunity to replace its small and fragmented markets with a large single market in which goods, services, capital and people can move freely oblivious of internal boundaries, the stakeholders note that the ideals of the agreement may not be realized without implementation.

With a strong and united voice, the African Union Commission, the African Union Development Agency (AUDA-NEPAD), the United Nations Industrial Development Organization (UNIDO) and the United Nations Economic Commission for Africa (UNECA) called on African and global leaders to amplify their efforts to create a space that unlocks the immense potential of Africa through the implementation of the Vision, Aspirations and Goals sets in Agenda 2063 and the United Nations Sustainable Goals (SDGs), adding that this is time to move from commitments to actions through implementation.

Interim Executive Secretary of, UN Economic Commission for Africa (UNECA), Antonio Pedro, stated that industrialization is not an option for Africa; it is imperative.

“There is yet another reason why industrialization is critical for Africa. Today, primary products – whether extractive or agricultural – account for the bulk of our exports to the rest of the world, while processed products dominate our imports. In far too many cases, we export the raw product and reimport the same thing in processed form – thereby exporting African jobs to others and effectively paying for the wages of foreign workers.

“We should be mindful that industrialization is not the business of Ministries of Industry alone. Instead, implementation of true industrial policy requires a whole of government and beyond approach and action, aligning industrial, trade and other sector policies and putting science technology and innovation at the centre of it to ensure that we remain globally competitive beyond our initial endowments and comparative advantages”, he said.

African Union Commissioner for Economic Development, Trade, Tourism, Industry and Minerals Ambassador Albert Muchanga noted the need to develop value chains and make Africa’s industrialization inclusive.

” Development of regional and continental value chains as well as the involvement of women and youth are key indicators of inclusivity. In addition, we must also work to move towards net zero carbon emissions and structural transformation. The panel discussions on decarbonizing African industry and electric car batteries are some of the initiatives in this direction,” he elaborated.

On her part African Union Development Agency (AUDA-NEPAD) Chief Executive Officer Nardos Bekele-Thomas said that “Inclusive and sustainable industrialization, that places women and youth at the center, represents a game changer to propel development in Africa, diversify our economies, increase job opportunities and strengthen our resilience against shocks and crises. For example, experts project that the sector could hit 666.4 billion dollars by 2030 – an increase of over $200 billion since 2015.”

Amb. Muchanga further cited management, innovation, intellectual property rights, industrial design, marketing, finance, branding and productivity as the key drivers of value generation in the continent.

“It is clear that to move up the global value chain, we must invest in skills to manage. This must include; among others, the management of the development of regional and continental value chains across Africa as well as quality control and intra-African supply chains, among others,” said Muchanga

He further opined that investment in skills to innovate and the patent will safeguard against “loss of intellectual property rights. Too often, our youth entrepreneurs lose rights to their innovations by cheaply selling them. Right now, there are some companies around the world that display on their websites that they hold as many as 100,000 patents cheaply bought from young people to maintain market leadership. As we move towards the Made in Africa standard, we must also invest in skills to design industrial products, skills to market and brand our product offerings”.

Ms Bekele-Thomas added “The lack of industry infrastructure and the inadequate development capital needed by our countries to position themselves to compete with others in the global value chains requires a multi-faceted, coordinated and cross-cutting approach to achieve the necessary structural adjustments that are fit for purpose for Africa’s specific contextual complexities” observing that limited industrialization base represents a missed opportunity for economic transformation and quality employment generation.

The AUDA-NEPAD Chief Executive Officer advised that “one of our most critical tasks lies in the expansion of job opportunities for workers in productive and decent paying jobs through strengthened industrial development.”

“This is particularly true for our women and youth sectors. Informal jobs in Africa account for 70 percent of employment in the agriculture and extractive industries sectors. We know that informal employment contributes the most to African countries’ GDP, with 9 out of 10 informal workers being women,” She added.

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