Manufacturing and agriculture critical for Africa's development

Shelling coffee

African countries need to develop their manufacturing sectors in order to create jobs and wealth and combat poverty.

That's according to the latest report of the UN Conference on Trade and Development (UNCTAD) and the UN Industrial Development Organization (UNIDO).

The report says that Africa is losing ground in labour-intensive manufacturing which is considered the entry-level step in industrial development.

Charles Appel reports.

The United Nations report says that Africa now accounts for about 1 per cent of global manufacturing.

It calls for a practical, well-designed approach to industrialization instead of continuing to rely on exporting raw materials.

Supachai Panitchpakdi, the head of the UN Conference on Trade and Development (UNCTAD) says that states have a critical role to play in promoting development in Africa.

Panitchpakdi: "One can look at the African example of Ethiopia. Only with the leadership of the government they have become successful in becoming a major exporter of cut flowers from Africa. Same thing as we are seeing in Côte d'Ivoire when also the government decided to link up with the value chain of cocoa more so than in the past to add value and successfully adopt quite low technology in grinding cocoa to become one of the newly industrializing economies.

However, despite these examples, the industrialization process has not taken hold on the continent as in some parts of Asia, according to Mr. Panitchpakdi.

Panitchpakdi: "In fact, some of the commentators and economists have begun to fear that we may losing out in terms of the process of 'de-industrialization' is actually gaining ground in Africa more so than the other way round. One glaring example is the share of manufacturing value-added share in Africa, which used to stand at 12.8 per cent in 2000 has dropped to only 10.5 per cent in 2008."

The report of the two United Nations agencies says that the development of the manufacturing sector in Africa should not be done at the expense of agriculture.

It points out that agriculture will continue to be a major source of revenue, employment and foreign exchange.

Kandeh Yumkella is the Director-General of the UN Industrial Development Organization.

Yumkella: "These economies must diversity. They must move into labour-intensive manufacturing to create jobs and wealth for the youth. They must also invest in agri-business, not just agriculture. They must look beyond food security, but agri-business, in the sense of creating supply chains, adding value."

According to Mr. Yumkella, African governments have to respond to the growing number of young people in Africa.

Yumkella: "The demographic changes in Africa suggest that governments will be under a lot of pressure to create jobs and ensure democratic, stable, well managed economies: if you look at some of the projections, by 2030 about 1.4 billion Africans, by 2050 about two billion. In one of McKenzie's reports 'The Lions on the Move' they estimate already that by 2040 there will be 1.1 billion Africans of working age, a lot of them young people."

He says that in addition to that there will be another problem of unplanned rapid urbanization.

Yumkella: "Over 50 per cent of the populations will move to the cities. They will not stay in rural areas. You look at that move to the cities, urban centres without jobs, without infrastructure without economic opportunities, there will be conflicts and chaos. The demographic numbers, the urbanization numbers mean that African governments cannot afford not to be pro-active in pushing for structural change in the economies to create wealth and create jobs. Otherwise you will have a similar instability as you have in North Africa, probably worse."

Mr. Yumkella also stresses the need for creating opportunities outside the cities so that people are not forced by poverty to move from rural areas.

Charles Appel, United Nations.

Duration: 3’31″

Filed under Today's Features.
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