Africa urged to tap into natural resources for industrialisation

BY VENERANDA LANGA in Addis Ababa, Ethiopia

AFRICAN Union trade and industry expert Rongai Chizema on Wednesday urged countries on the continent to ensure that the their vast natural resources promote accelerated industrialisation in line with Africa’s vision 2063 plan.

The policy, known as the Action Plan for the Accelerated Industrial Development of Africa (AIDA), was endorsed in 2008 by African countries.

The Zimbabwean national, who is AU chief technical adviser in the department of trade and industry, told journalists during a workshop on AIDA that to successfully implement the industrialisation programme, Africa needs to effectively use its rich resources by exporting them as beneficiated products.

AIDA’s main principles include ensuring that Africa emerges as an industrialisation continent through effective use of its resources in order to end the resource curse, where the continent is “rich”, but very poor due to lack of industrial capacities and capabilities, inadequate entrepreneurship, energy and infrastructure bottlenecks and several other factors, including issues of bad governance.

“Africa should now move as one group in order to achieve self-reliance, economic integration, and to achieve vision 2063,” Chizema said.

“When we talk of industrialisation, we want to see transition from traditional production to organised transition with mechanised value-addition of raw materials into products, and structural transformation, where we shift from the structure of production of raw goods to a much more sophisticated production of goods and services (finished products).”

Chizema said while developed countries might not be as resource-endowed like Africa, the fact that their industrialisation strategies were based on beneficiation has resulted in them becoming highly industrialised.

An example, he said, was in the pharmaceutical industry, where most of the flora and fauna used to produce medicines is actually in Africa, but the continent is importing billions of dollars worth of medicines from India and other industrialised countries due to lack of clear-cut policies and implementation of existing policies on beneficiation.

Chizema said the African Continental Free Trade Area, which is a critical policy to support industrialisation, has a potential to harness US$3 trillion capital, and with good implementation of industrial policies like Agenda 2063, Africa can deliver jobs and end poverty.

“Some of the priorities in the industrialisation chain are agro-industry development, agri-value chains, and mineral beneficiation, as well as pharmaceuticals because all the flora and fauna for medicines comes from Africa and we export it, and it comes back to Africa as finished products,” he said.

Chizema said there is need to support small-and-medium enterprises (SMEs), which are close to 90% of businesses in Africa by ensuring they are included in the value chain of big investments.

Ron Osman Omar, officer in charge of the AU department of trade and industry, said industrialisation is pivotal for Africa as there were no developed countries in the world that are not industrialised.

“Africa now needs to think outside the box and consider financing through local content. Most people think that we need international companies to finance SMEs, but why not African financing? We have a lot of people with money in Africa and why can’t they invest in the continent? Our people and leaders need to be educated that investment can be local,” Omar said.

Head of German Development Cooperation in the German embassy in Ethiopia, Barbara Schaefer, said Germany was in full support of the AU’s vision 2063, the industrialisation strategy, promotion of special economic zones, quality infrastructure in Africa, and trade in goods and services.

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