Transforming the economic structure of a country — let alone a continent — from a predominantly agrarian model to an industrial one is a challenge. Yet just such a shift holds the key to Africa’s future if the region wants to enhance its economic success of the past decade in the next. An African industrial revolution to sustain economic growth was a subject matter at the African Economic Conference, held in Johannesburg, South Africa, October 28-30. Heads of state, finance ministers and others in attendance want to put an end to Africa being an exporter of its commodities and raw materials wealth and the world’s least industrialized region.
By increasing investment in industrialization the continent could better protect itself from external shocks, such as global commodities boom and bust cycles. It could help expand the volume and value of trade, which in turn could lead to the social benefits of greater job creation. High levels of unemployment are persistent throughout the continent. As has happened in other parts of the world, industrialization could lift millions of Africans out of poverty. Among the growing sectors – with enormous potential to become more mature – are information and communications technology (ICT), science and technology or environment and climate change.
Regional integration, the main theme in Johannesburg’s conference, as a way to expand intra-African trade is closely connected to industrialization by helping develop larger markets and fostering greater competition. (Read more: Private sector is key to boosting intra-African trade). Here lies a potentially new role for the African Union, the continents 54 countries who now compete for the same external markets.
The need for an African industrial revolution was also made clear in March at the 6th Annual African Union-UN Economic Commission for Africa (ECA) joint meeting. A report presented at the summit, sharing its title, ”Industrialization for an Emerging Africa,” focused on developing industry. It couched its recommendations to national governments in terms of promoting economic development through commodity-based industrialization as a way to address poverty, inequality and unemployment. Adding value locally to what is now being exported in raw form is at the core of the change.
Many obstacles to industrialization and intra-Africa trade remain – tariffs, rules of origin and trade partnership agreements among them. Nobody says it will be easy. But some of the bottlenecks, including the lack of infrastructure and energy throughout the continent, could be confronted. The most complicated challenges, which will always hamper growth, are poor governance and corruption, which also needs to be tackled in many countries.
The idea of an African industrial revolution is not new. However, it is — finally — reaching the top of the agenda of African policy-makers. An Action Plan for Accelerated Industrial Development of Africa (AIDA) was launched in 2010 though little progress has been achieved since. The political will exists, but the problem remains translating words and reports into concrete action.