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African Nations Need Industrialisation and Economic Transformation

UNITED NATIONS, Apr 13 2014 (IPS) - Youth represent 40 percent of the African continent’s population. This number is expected to rise over the next 20 years and represents the population bearing the brunt of African economies’ failure to create sufficient jobs and address poor economic management.

The 2014 Economic Report on Africa (ERA), developed on the theme of “dynamic industrial policy in Africa”, is based on the study of industrial policy frameworks in 11 African countries. It aims to identify and suggest remedies regarding the “challenges and pitfalls” facing the “design and implementation” of industrial policy in Africa.

“It is only through industrialisation and structural transformation that Africa can ensure broad-based growth with greater impact on employment creation,” Maged Abdelaziz, U.N. Under-Secretary General and Special Adviser of the Secretary-General on Africa, said Friday.

Speaking at a meeting, where the report was released, he said:
“ERA 2014 will provide guidelines on institutional arrangements for promoting industrial development.”

Over the last decade, African nations have experienced an average of five percent annual growth, with some nations achieving seven percent. But, the ERA indicates that without a corresponding development of industry and structural economic transformation, this largely commodity-driven growth has not translated into employment or social development.

“For too long African countries have formulated policies within a rather static framework that failed to address market failures or respond to emerging regional and global challenges and opportunities,” said Dr Carlos Lopes U.N. Under-Secretary General and Executive Secretary of the Economic Commission for Africa (ECA).

Since the 1980s, the contribution of manufacturing to gross domestic product (GDP) in Africa has steadily declined from about 12 percent to about 11 percent.

“If this trend continues, it could end up marginalising African countries in manufacturing for their domestic and international markets and in turn further jeopardizing productivity, employment as well as innovation and technological accumulation,” explained Lopes.

While Africa has experienced notable growth over the last decade, this has not translated into sufficient job creation or the broad-based economic and social development needed to reduce the high poverty and rising inequality in many countries, said Abdelaziz.

The report outlines the importance of policy flexibility, autonomy and efficiency, while also noting the vital need for associated political support.

Thirty-four of the 48 nations on the U.N. Least Developed Countries (LDC) list are located in Africa.

“If we can ensure…that they are really at a certain level of development, [noting the strategic aid based objective that many LDCs have for trying to stay on the list], I think that that will help a lot in releasing many of the African countries from the LDC list,” Abdelaziz told IPS.

The ERA launch in 2013 identified that African countries have made steady progress in addressing some of their key social and economic challenges. Nevertheless, the imperative for industrialization remains.

“Industrialisation remains key for Africa’s structural transformation and is therefore a precondition for Africa to obtain an inclusive economic role,” said Tete Antonio, Permanent Observer of the African Union to the U.N.

At the 2014 report release, many African nations expressed their support for and confidence in the ERA findings and the U.N. analysis mechanism.

“On the continent, we see countries like Mauritius and South Africa displaying sophisticated and effective high levels of coordination. If they can do it, so can the rest of Africa,” said Lopes.

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