INDUSTRIALISATION across the Southern African Development Community (SADC) region is critical, if the regional economy is to be diversified away from its current reliance on the export of raw commodities, and towards supporting economic growth and employment creation.
There is broad acceptance that SADC member states are still struggling to add value to their mineral products, ahead of export, which is also related to the need to increase the levels of intraregional trade and investment – particularly trade and investment that would be supportive of regional value chains.
To support such a transition, much emphasis is on the adoption and implementation of the so-called SADC Industrialisation Strategy and Roadmap, which outlines how the region can move from a commodity-driven growth path, to one of value-addition, knowledge and industrialisation.
The roadmap, adopted at the SADC Summit of Heads of State and Government in 2015, sets out three potential growth paths – agroprocessing, mineral beneficiation and downstream processing, and service-driven value chains.
These paths are mutually supportive and inclusive, encompassing the combination of downstream value addition and backwards integration of the upstream provision of inputs, intermediate items and capital goods.
Industrialisation is the most effective driver of structural poverty reduction, owing to its capacity to expand employment opportunities, boost productivity and increase wages.
It can contribute to transformation in the agriculture, trade and transport sectors, and is key to the economic development of any SADC country, including Namibia.
However, industrialisation requires a focus on improving competitiveness and ease of doing business, as well as enhancing the quality of products, which can compete internationally.
Strengthening regional economic cooperation, however, also requires reforming the business environments in SADC member states.
According to an Organisation for Economic Cooperation and Development (OECD) July 2017 economic survey, little progress has been made regarding industrialisation, despite it having been earmarked as a priority for the region.
Even though infrastructure plays a major role in Southern Africa, significant gaps remain in the SADC region, the report highlights.
The report also finds that a lack of institutions or deficiency, skills shortages and complex regulations, are common across SADC countries, as are regulatory barriers and monopolistic behaviours that hamper competition.
In conclusion, there is a growing acceptance that regional integration is going to depend on the creation of physical linkages, as much, if not more, than it will depend on tariff liberalisation. However, hard infrastructure alone will also not guarantee higher levels of intraregional trade and investment. Besides political will, real and sustained effort will be required by all SADC member states, to ease the burden of doing business across borders, by getting the ‘soft’ factors to line up coherently.
Confidente. Lifting the Lid. Copyright © 2015