Africa’s recovery relies on its manufactured exports – former SA trade minister

The pandemic's disruption of global supply chains and the race for a vaccine, has added new urgency to the need for African economies to become more productive, South Africa's former trade and industry minister Rob Davies says.


Image : IC Publications

The African Continental Free Trade Agreement (AfCFTA) is a golden opportunity for economies on the continent to transform their supply chains and reverse the economic degeneration caused by the pandemic.

This was the message of the Adebayo Adedeji Memorial Lecture held on the side-lines of a meeting of African finance ministers in Ethiopia on Monday.

Hailed as the “prophet of regional integration,” Adedeji’s legacy holds important lessons for the continent’s industrial revolution and re-emergence from the ashes of Covid-19, says Davies.

A pipe-smoking Nigerian economist and public servant, Adedji diagnosed the continent’s key vulnerability as its underdevelopment, springing from a weak productive base that relies on subsistence and producing raw exported goods.

“Africa has to break the apron strings of structural and relational dependence on producing a limited number of cheap primary commodities for export,” said Davies, quoting Adedji’s landmark treatise, the African Alternative Framework to Structural Adjustment Programmes for socio-economic recovery and transformation (AAF SAP) written in 1990.

To become rich African nations need to diversify their economies by replicating East Asia’s aggressive focus on manufactured exports.

“Poor countries have stayed poor because they have remained trapped in their colonially defined role as producers and exporters of some primary products – agricultural or mineral –used in industrial production elsewhere.

For instance, the mineral used in the manufacture of the iPhone 6, mined from the rich coltan seams of the Democratic Republic of Congo, is sold to Chinese manufacturers for a paltry $1.06, a sum just 0.16% of the cost of the finished product, which markets for $649 in the US.

But as the value of raw materials declines, the revenues to African countries are dwindling too, he warns, making unprocessed goods an unsustainable means for generating future wealth.

Rob Davies, (bottom centre) former South African minister of trade and industry speaking at this year’s Adebayo Adedeji Memorial Lecture

The global race for a vaccine highlights the perils of African countries being consumers and not producers of medical supplies. While the disruption of the global supply chain has fuelled calls for the production of essential goods, Davies said.

As the continent makes the slow rise to its feet from “the Great Lockdown Recession,” Davies urges African nations to look to Adedji’s policies for guidance.

“African integration must ‘…involve three mutually interdependent dimensions: the integration of the physical, social and institutional infrastructure; the integration of production structures; and the integration of the African markets”, he said quoting the manifesto’s text.

The AfCFTA’s real prize will be creating regional value chains that produce higher value goods and services, that imprint their own ‘Made in Africa’ brand.

In order to unleash the potential of zero-tariff trade, African countries need to be given the same policy space as other early industrialisers, and not pressured into accepting “unfair trade rules,” Davies added.

Sub-Saharan Africa’s collective GDP shrank by an average of 3.7% last year, with growth in 2021 projected to be 2%, according to World Bank estimates.

This year’s Adebayo Adedeji lecture took place on the sidelines of the Council of Ministers of Finance (COM 2021) held by the United Nation’s Economic Commission for Africa (UNECA) in Addis Ababa, Ethiopia. Many delegates attended this year’s event virtually, with discussions centred around industrialisation policy under the AfCFTA. Ethiopian Prime Minister Abiy Ahmed and Kenyan President Uhuru Kenyatta were among those attending the event that takes place from 17-23 March.

Video: Watch the 2021 Adebayo Adedeji Memorial Lecture here:

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