How Africa Can Ensure Sustainable Industrial Development

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How Africa Can Ensure Sustainable Industrial Development

14 nov. 2023 17:27

The 2023 African Economic Conference (AEC), jointly organized by the African Development Bank (AfDB), the Economic Commission for Africa (ECA), and the United Nations Development Programme (UNDP) will be held in Addis Ababa, Ethiopia, from 16 to 18 November 2023, on the theme “The Imperatives for Sustainable Industrial Development in Africa.” The continent’s under development and unemployment and poverty woes stems from the fact that the level of industrialization. Over the last decade, Africa has recorded an annual average growth rate of 5 per cent, with some countries reaching more than 7 per cent. But that growth, based mainly on commodity exports and extractive industries, has demonstrated a limited capacity to drive socioeconomic transformation, not least because most of its benefits have accrued to a small share of the population. Africa has the tools it needs to change this beginning with a massive untapped labour force. Indeed, some 60 per cent of Africa’s unemployed are young people. The continent’s total workforce is expected to increase by 910 million from 2010 to 2050. Throughout modern history, industrialization has been the most effective driver of structural poverty reduction, owing to its capacity to expand employment opportunities, boost productivity, and increase wages. No developing country has achieved the economic growth necessary to become a developed country without industrializing. The COVID-19 pandemic exposed the structural insufficiencies of industries on the continent. The pandemic highlighted the continent’s dependency on foreign manufactures and intermediate goods, particularly pharmaceuticals and medical devices required to respond the health crisis. From the macroeconomic perspective, a strong manufacturing sector is argued to improve a country’s external account balance by decreasing imports and diversifying exports, thereby increasing resilience to external shocks as compared to reliance on primary commodities. Therefore, the key indicators of industrial development have traditionally been manufacturing value added (MVA) and manufacturing exports as a percentage of gross domestic product. The share of MVA in GDP had declined to circa 10 per cent by 2006, a level the countries had achieved in the mid-1960s, and also registered in 2017. By the dawn of the 21st century, economic growth rates in Africa reached impressively high levels, even during the 2008-2009 global financial crisis, strikingly lagged by growth in manufacturing, except in a few countries like Nigeria, ...