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Commodity-based industrialization key to long-term development in Africa – UN report

A factory in Kenya.
World Bank/Curt Carnemark
A factory in Kenya.

Commodity-based industrialization key to long-term development in Africa – UN report

Sweeping political and economic changes over the last half century have set the stage for Africa’s emergence as a global economic power, and the continent should take advantage of that opportunity through a commodity-based industrialization strategy, according to United Nations economic report launched today.

“Massive industrialization based on commodities in Africa is imperative, possible, and beneficial”, states the 2013 edition of the Economic report on Africa, co-authored by the United Nations Economic Commission for Africa (ECA) and the African Union and launched at an event at the UN’s New York Headquarters this afternoon.

The report, entitled Making the most of Africa’s Commodities: Industrialization for Growth, Jobs and Economic Transformation, argues that Africa needs to frame specific policy for commodity-based industrialization for each country to ensure initiatives that foster linkage development and accelerate that process, through leveraging Africa’s abundant resources and high commodity prices and the changing global production process.

Individually and collectively, African countries must embark on a “bold transformation” towards a commodity-based industrialization strategy would allow the continent to take charge of its own development, the report says, which is necessary if African countries are to be able to address youth unemployment, poverty and gender disparities, and other challenges it faces.

The report also sets out ways African countries can design and implement industrial and other development policies to promote value addition and economic transformation, and to reduce their dependence on producing and exporting unprocessed commodities.

“Making the most of Africa’s commodities requires appropriate development planning frameworks and effective industrial policies that are evidence based and take into account what influences linkage breadth and depth, as well as the structural and country-specific linkage drivers,” the report says.

It also maintains that by adding value to their raw materials locally, African countries can bring about diversification of technological capabilities, an expanded skills base and deepened industrial structures in individual countries.

The primary data were collected and country case studies prepared for nine African countries in the five subregions—Algeria, Cameroon, Egypt, Ethiopia, Ghana, Kenya, Nigeria, South Africa and Zambia.

While some of those nations have made modest progress in forward and backward linkages to their commodity sectors, others still have some ground to cover, according to the report, which adds that interventionist state policies and continental initiatives could help improve the situation.

To further boost current levels of linkages, the ECA-AU report calls for urgent moves to reduce the infrastructural constraints and bottlenecks on the continent. It also recommends improved policy implementation through coordination among relevant ministries in order to reduce the incidence of coordination failure, which has for long plagued the continent.