African Governments Challenged to Set Up Innovative Institutions
Africa Investment

African Governments Challenged to Set Up Innovative Institutions

African states have been challenged to set up innovative and inclusive institutions capable of designing and implementing effective industrial policies and processes that will advance socio-economic transformation.

A joint Statement of the AUC, AUDA-NEPAD, UNIDO, UNECA on the occasion of the Africa Industrialization Day indicated that the prolonged effects of the COVID-19 pandemic, the pressing challenges posed by climate change and the Russia-Ukraine conflict that have disrupted the global supply chains with huge consequences globally and more fundamentally on African economies.

“These circumstances have once again revealed the extreme fragility of African economies against external shocks and reinforced the need for structural changes necessary for the acceleration of productive transformation through a determined shift towards sustainable and resilient industrialization in the years and decades ahead.”

The statement added that considering endemic factors that have stifled Africa’s economic transformation, it is important to reassess the continent’s capabilities in the face of external shocks.

“In this regard, it is important for the African Union Member States to set up innovative and inclusive institutions capable of designing and implementing effective industrial policies and processes that will advance socio-economic transformation, as stipulated in global and continental frameworks such as the African Union Agenda 2063, the United Nations Sustainable Development Goals and the Third Industrial Development Decade for Africa (IDDA III).”

The organisations appreciated that Africa is widely seen as a future investment and development frontier given its extraordinary economic potential. This year’s theme: “Industrializing Africa: renewed commitment towards Inclusive and Sustainable Industrialization and Economic Diversification” allows us to reflect on the need for accelerating industrialization in Africa as a means to strengthen its ability to navigate a changing geopolitical landscape where nearshoring appears to be an effective response to potential disruption of global supply chains. In that context, Africa must continue to ride on the huge potential it has in various areas including in agriculture and agro-processing.

“Statistics show that the continent can, if the right investments are made, become the food basket of the world given its 60 percent endowment in global uncultivated arable lands. To achieve this, there is need for determined commitment and implementation by African leaders and the private sector in investing massively in agricultural transformation and meeting the target of sustainably allocating 10 percent of public expenditure to agriculture as prescribed in the 2014 Malabo Declaration “Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods”.

They said that it is critical to move from a food emergency to sustainable and resilient food production in the years and decades to come.

“As Agriculture is an economic opportunity enhancer, it must therefore remain a priority investment area for accelerated Africa’s industrialization in the perspective of reducing continental exposure to external future shocks.

“In the context of the African Continental Free Trade Area, an agricultural driven industrialization will harness the regional linkages and be critical in creating new and strengthening strategic regional value chains that bring prosperity for all the segments of Africa’s population and mainly for SMEs, women, and youth. Investing in strategic value chains such as the cotton and apparels industry as well as the pharmaceutical industry is critical to improving Africa’s resilience to future health and pandemics.”

 The organisations said they salute efforts so far deployed at national, regional and continental levels to ensure that essential medicines are produced and supplied to African citizens.

“The 3 setup of national and regional continental medicines production centers is deemed critical in developing sustainable regional pharmaceutical value chains in the framework of the African Medicine Agency (AMA) as a means to accelerating implementation of the objectives of the Pharmaceutical Manufacturing Plan for Africa (PMPA).”

 In the cotton and apparels industry, they said there is need for a comprehensive approach that allows Africa to take advantage of the economic opportunities in this vital sector for jobs and the wellbeing of African people.

“The disruption of global supply chains also opens a window of opportunity to harness a strategic commodity-oriented industrialization in a climate friendly manner.”

The statement indicates that Africa has the huge potential of embracing this shift through targeted investments in commodity value chains including in the framework of the Africa’s Mining Vision that sets actionable priorities for Africa’s mining sector that can become a key enabler of a diversified, vibrant and globally competitive industrial African economy.

“Accelerating productive transformation in this strategic sector requires a strategic shift from the traditional extraction and export of commodities to massive investments in productive transformation and industrialization in Africa.”

“This need and can be done if there is a renewed commitment by all parties, public and private, to transform African commodities as a means to widen continental economic opportunities through innovation and jobs creation.”

The organisations called upon African governments to continue stepping up their efforts in improving Africa’s business and investment environment.

“The immediate domestication and implementation of the African Union Commodity Strategy is therefore key as it effectively articulates all these issues and provides a turn key solution for the utilization of the African Commodities sector. Efforts in that direction are already tremendous and need to be further strengthened to turn Africa’s potential to real business opportunities for the good and wellbeing of African citizens.”