Making the Most of Africa s Commodities: Industrializing for Growth, Jobs and Economic Transformation

Transcription

1 Making the Most of Africa s Commodities: Industrializing for Growth, Jobs and Economic Transformation

2 Key messages African countries are growing but have been unable to fulfil their industrial potential. Massive industrialisation based on commodities is an imperative that is possible and beneficial. Evidence of value addition and linkage development exists in Africa but the experience is mixed Success requires firms to have a good understanding of the critical factors that influence linkage development. Effective industrial policies and development plans are critical for Africa to address constraints and industrialize Trade agreements and intra-africa trade and regional integration must be used to foster Africa s industrialization.

3 Economic growth strengthened as political tensions eased across the continent

4 However, export diversification remains weak in most African countries

5 And the commodity price boom has increased commoditydependence in Africa

6 High revenue lost from not adding value - Value-added content of selected developing countries cocoa exports, 2011

7 Value added content of selected developing countries timber export, 2011

8 Commodity-based industrialization and moving up the value chain has dynamic benefits Employment effect Income effect Price benefits and price stability Diversification of local technological and industrial capabilities Lateral migration into other sectors Efficiency gains of cluster development and positive spillover effects in terms of knowledge and information

9 Benefits of moving up the coffee value chain - Example

10 P O L I C Y What influences linkage development? Structural factors these are difficult to influence through government intervention Country Specific factors this is where a government has leverage For example: Ownership, Infrastructure, Skills and capabilities, Linkage strategies etc

11 Asian/Latin America experiences Salient features of successful linkage development: Ambitious policies for the resource sector Domestic markets to move up the value chain Marketing links Domestic firm capabilities / partnerships Industrial policies, export restrictions, fiscal incentives

12 Making the most of linkages in soft (food) and industrial commodities Constraints and opportunities Survey Findings from 9 country case studies

13 Analytical framework Lead firms strategies CSFs Location and infrastructure Industry structure Industrial policy Technical features of the value chain Depth and breadth of local linkages Trade restrictions, standards, other constraints

14 VALUE-ADDED CONTENT OF COCOA EXPORTS, GHANA, NIGERIA AND CAMEROON 2011 ($ THOUSAND)

15 Cocoa in three countries - different trajectories

16 Coffee, Tea and Agro-processed value chains a summary comparison..

17 Factors affecting linkage development Egypt s textile industry

18 Value added content of Ethiopia s leather/hide export

19 Linkage development in the mineral sector three country comparison.

20 A regional hub linkages from South Africa s mining sector to the rest of the economy

21 Variation of factors affecting linkage development by sector and country summary conclusions of a nine country case study

22 Critical success factors vary by sector and value chains a summary.

23 Factors driving linkage development Focus on country-specific factors to foster linkage development. Nationality of lead firms and end markets matters Build Firm Capabilities management & worker Supplier development programmes are key Infrastructure hard and soft - crucial Government capabilities skill & institutions Attack the misalignments Appropriate, evidence-based, prioritized, monitored, incentivised policies

24 Making the most of Africa s commodities a nine point policy framework Adopt a coherent policy framework Create institutional industrial policy mechanism Develop local content policy Raise lead firm procurement, sourcing and processing Run supply-chain development programmes among major commodity firms Boost local skills and technologies Negotiate regional trade agreements and foster intra-african trade Address infrastructure bottlenecks Coordinate ministries to improve implementation

25 Thank you

26 SESSION 3