The Sunday Mail
This week, Zimbabwe hands over the Sadc Chairmanship to Botswana after a successful tenure that engineered an economic revolution that will benefit the whole of Africa.
A major milestone Sadc achieved under President Mugabe’s visionary leadership is the Industrialisation Strategy and Roadmap.
The Strategy focuses on building southern Africa’s industrial capacity, piggybacking this effort on value-adding the region’s natural resources.
We publish part of the roadmap below.
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Introduction
The primary orientation of the strategy is the necessity for the structural transformation of the Sadc region by way of industrialisation, modernisation, upgrading and closer regional integration.
The strategic thrust must shift from reliance on resources and low-cost labour to increased investment and enhanced productivity of both labour and capital.
In the 21st century, Sadc economies can no longer rely on rich resources or low-cost labour as a platform for industrialisation and modernisation.
The strategic thrust must shift from factor accumulation growth — employing more labour and investing more capital — to total factor productivity, which is the efficiency with which resources are deployed in the production process.
Catching up is dependent on narrowing productivity gaps both between sectors within Sadc economies and with more advanced economies, necessitating a focus on advanced skills and state-of-the-art technologies.
Industrial policy must be crafted within the context of a country’s competitive advantage, including future or nascent advantage. The essence of transformation is diversification via upgrading and climbing the technology ladder.
Successful industrialisation will be achieved not just by doing things better — though that is a key factor — but also by doing different things, implying industrialisation is achieved through diversification.
The primary orientation of the strategy is the necessity for the structural transformation of the Sadc region by way of industrialisation, modernisation, upgrading and closer regional integration.
Industrialisation should be seen as a long-term process of structural transformation and enhanced competitiveness of the entire Sadc region.
The Sadc region is in catch-up mode and needs to run faster than other emerging economies to converge with upper middle-income and high-income countries.
Strategic objectives
Strategic goals are both qualitative and quantitative.
The strategy envisages substantial quantitative shifts in industrial structure, manufacturing production, exports, particularly those in the medium and high technology categories, while doubling industrial employment.
It will lift the regional growth rate of real GDP from four percent annually (since 2000) to a minimum of seven percent a year; and reverse de-industrialisation and double the share of manufacturing value added (MVA) in GDP to 30 percent by 2030 and to 40 percent by 2050, including the share of industry-related services.
The strategy will increase the share of medium-and-high-technology production in total MVA from less than 15 percent at present to 30 percent by 2030 and 50 percent by 2050; and increase manufactured exports to at least 50 percent of total exports by 2030 from less than 20 percent at present.
It will build market share in the global market for the export of intermediate products and increase the share of industrial employment to 40 percent of total employment by 2030.
The strategy is transformational in terms of socio-economic transformation nationally and regionally.
It seeks to achieve a major socio-economic and transformation at the national and regional levels; accelerate growth momentum and enhance comparative and competitive advantage of the economies of the region; and diversify and broaden the industrial base and inter-dependences.
In addition, it will enhance the productive capacity, productivity and competitiveness of Sadc economies, and provide a framework for technological and industrial catch-up, export diversification, natural resources beneficiation, enhanced value-addition and increased regional trade and employment generation.
It will develop viable regional value chains capable of interacting with global value chains and identify areas where the Sadc region can have the greatest success in capturing high opportunities based on present and future strengths and capabilities; and build a collaborative but challenging strategic partnership between governments, the private sector, the civil society and the development partners as a compact for industrialisation.
Ultimately, it will build firm and enduring foundations for a modernised Sadc economy.
Industrialisation
The Sadc Industrialisation Strategy emphasises 10 essential elements/prerequisites for industrialisation.
1. Industrialisation is a key for transformation and strengthening inter-industrial links;
2. Factor productivity as a fundamental metric of development and transformation processes;
3. Technological upgrading and innovation as enablers and creators of employment and competitiveness;
4. Geography and natural resources as crucial factors in establishing national and regional economic clusters to support diversification and interlinkages;
5. The recognition of possible impact of the emerging global technological evolutions on trade patterns;
6. The crucial role of the government as a developmental agent in perceiving, developing, promoting and implementing industrial development and creating the requisite environments;
7. The importance of establishing a compact for industrialisation and development, consisting of government, private sector, civil society, development partners and prospective investors;
8. The acceleration of the tempo of Sadc’s integration programme and promoting the complementarities of national and regional efforts on industrial development issues and leveraging the positive aspects of the various regional and global agreements of which Sadc is party;
9. Creation of a stable macro-economic environment and strong micro-economic foundations for the development and growth of the private sector and promotion of regional economic interdependence; and
10. The critical importance of co-ordination and interfacing of the industrial development efforts nationally and regionally — to ensure maximisation of gains and avoidance of harmful competition.
Core pillars
The Strategy is anchored on three pillars:
(i) Industrialisation as champion of economic and technological transformation;
(ii) Competitiveness (at the firm/industry, country and regional level) as an active process to move from comparative advantage to competitive advantage; and
(iii) Regional integration and geography as the context for industrial development and economic prosperity.
The long-term transformation of the Sadc economies requires focused qualitative and quantitative shifts in industrial structure, its enabling environment and the interdependence with other sectors to maximise the direct and indirect value addition in the industrial sector broadly defined to include related support services.
In so doing, industrialisation will need to be situated within the global dynamics of competitiveness, quality of products as well as flexibility to respond to internal and external demand dynamics.
The positive spill-overs from industrialisation will stimulate employment and substantially raise income levels.
A sustainable industrial sector of the future should be resilient and with high propensity for continuous modernisation.
Sadc countries are equally challenged to substantially enhance their competitiveness to supplement their inherited comparative advantage in natural resource-based production and exports.
Action should, therefore, target the competitiveness of firms as well as the economies at large.
Deeper regional integration reinforced by industrialisation and enhanced competitiveness should provide the context for the region’s development.
Enabling the productive and distribution capacities of the process will help remove structural impediments and enhance factor productivity.
The pillars are interdependent: Each is uniquely important, but only when they are pursued together will they satisfy the requirement of maximum effectiveness.
