AU outlines 10 key factors that can help boost Africa’s industrialization
The African Union (AU) has outlined some key factors that will help boost industrialization in Africa.
In a press release dated November 30, 2022, the African Union asserts that, African leaders have committed to far-reaching and firm decisions to accelerate industrialization, economic diversification and trade on the continent, with full ownership by the citizens.
According to the press release, African leaders have reaffirmed their determination to ensure that Africa’s industrialization and economic diversification is financed in a predictable manner and with the urgency of identifying and addressing the impediments to productivity and growth through infrastructural development, energy, access to finance, digitalization, innovation, and skills development to achieving economic diversification.
Some commitments made by African leaders at the just concluded African Union Extraordinary Summit on Industrialization and Economic Diversification, and the Extraordinary session on the African Continental Free Trade Area convened in Niamey, Niger on November 25, 2022 include;
- To accelerate a commodity-based industrialization as an engine of growth, productive jobs and economic diversification through a regional value chains on the continent’s natural resources endowments, with priorities on health and pharmaceutical, automotive, minerals beneficiation, food and nutrition and apparels of cotton industries in order to reduce the continent’s external dependency. In this regard, the African Union Commission will now draft a report with clear recommendations on strengthening regional value chains.
- Moreover, to increase investments in infrastructure and energy with the support of financial institutions and partners to reduce production costs, and boost the competitiveness of the African economies.
- Additionally, to enhance domestic resource mobilization to ensure sustainable financing on Africa’s industrialization, and allocate a minimum of 5 – 10% of the national budget dedicated to the industrial development.
- Furthermore, to develop sustainable Special Economic Zones and Industrial Parks as well as work with and support existing ones in member states as a means to overcoming existing industrial infrastructure constraints, and become hubs for regional value chain integration.
•Moving forward, to ensure inclusive and sustainable industrialization, the Heads of State and Government and other stakeholders will have regular dialogue with the private sector in order to scale up high level engagement on industrialization.
- The African Union Commission in collaboration with other institutions will strengthen support to Member States in creating an enabling business environment for private sector to thrive.
• And also, the leaders endorsed the African Union Small and Medium Strategy. Relatedly, the African Union Commission is tasked with establishing and operationalising the Africa Enterprise Network. The African Union Commission will also work with the African Regional Standards Organization (ARSO) and the Pan-African Quality Infrastructure (PAQI) to expedite the finalization of the Made in Africa Standards and Guidelines.
• The leaders have committed to reserve a minimum of 10% of public procurement to local enterprises, to strengthen the private sector development and industrialization;
• At the Summit, the leaders agreed to establish, at the national levels, programmes for industrial linkages between the educational system and the labour market, aimed at promoting competitiveness of the private sector through development of soft and hard skills necessary for industrialization in particular in the areas of science, technology, engineering, and mathematics (STEM); technical and vocational education and Ttaining (TVET), and robotics and artificial Intelligence.
• Relatedly, the African Union Commission and the African Capacity Building Foundation (ACBF) will prepare a feasibility study on the establishment of an African Manufacturing Institute to support Member States and the private sector in the development of modern manufacturing skills and fostering innovation in the manufacturing sector that will accompany the ongoing structural economic transformation in Africa.
