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‘Creating value-chain linkages, key to accelerated industrial devt’


AfDBWith the plans to aid the proposed establishment of the Continental Free Trade Area (CFTA) underway, stakeholders including the Economic Commission for Africa (ECA), the African Development Bank (AfDB) and the African Union Commission (AUC) have urged African societies to transform the structure of their economies through accelerated industrial development and by creating supply and value chain linkages across the continent.

According to the stakeholders, the move became imperative considering the fact that despite growth during the past decade and relatively good performance, African economies lack industrialisation and integration.

Specifically, the stakeholders in their reports show that recent growth has had no impact on the underlying structural design of these economies and to diversify its economies, the continent must reverse its dependence on merchandise exports dominated by raw and unprocessed commodities.

For the CFTA to be more meaningful, the stakeholders recommended for African states to transform the structure of their economies.

Indeed, the ninth session of the Economic Commission for Africa Committee on Regional Cooperation and Integration (CRCI) expected to convene in Addis Ababa from 7 to 9 December 2015, will discuss means of promoting and accelerating productive integration through trade and market integration; economic diversification; competitiveness; infrastructure; regional and continental value chains development; and the financing and investments needed to meet implement these policies.

Already, studies, including the recent ECA Economic Report on Africa (ERA), suggest that to improve intra-African trade, the continent must address its overall weak productive capacities and lack of competitiveness and technological sophistication.

The studies cite infrastructure as one of the key impediments to productive integration in Africa.
“An insufficient infrastructure has adverse effects on supply and value chain linkages, not only in the agriculture sector on which the majority of Africans depend, but also in manufacturing and other sectors of the economy. It also affects growth, the creation of jobs and eventual elimination of widespread poverty.
“With infrastructure in place, intra-African trade and regional value chains can effectively facilitate Africa’s industrialization and eventual entry into global value chains”, the reports suggest.

Themed “Enhancing Productive Integration for Africa’s Structural Transformation”, this ninth session of the Committee will meet to review several documents such as the report on Assessing Regional Integration in Africa VII: Innovation, Competitiveness and Regional Integration (ARIA VII) which recommend that Africa implement innovation-friendly policies if it is to achieve sustained economic growth and transformation.

The ARIA VIII and ECA Economic Report on Africa recommend increasing investments in hard infrastructure, financial services, soft infrastructure and a creation of conducive macroeconomic policies and business environment. Investments in transport, energy, and information and communication technology form a strong basis for a viable and an economic oriented regional integration, the reports argue.

While the eight session of the Committee focused on concrete policy actions and measures required to enhance progress in trade, regional cooperation and integration, this ninth session will address specific policies such as the Action Plan for Boosting Intra-African Trade, and the envisaged establishment of the Continental Free Trade Area (CFTA) which African Union Assembly of Heads of State and Government wish to launch by 2017.

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