SADC approves industrialisation framework

 

Southern Africa has taken another bold step to promote industrial development following the approval of a framework that sets out strategies to promote value-addition in the region.

The recently approved SADC Industrial Development Policy Framework recognizes the need to build economic infrastructure; strengthen the technology base, economies of scale and scope, as well as improve the competitiveness of industries.

Approved in 2013, the framework aims to co-ordinate regional co-operation to build a diversified, innovative and globally competitive industrial base that contributes to sustainable growth and employment creation for the mutual benefit of SADC countries.

It provides a reference point for guiding the co-ordination of complementary policies, activities and processes that will form part of the regional industrial development framework.

The framework recognizes that formulation and implementation of industrial policy is essentially a national prerogative and that there is no blueprint and no “one-size-fits-all” approach for the region’s industrialisation process.

Member States are encouraged to continue to implement national policies and strategies for stimulating and enhancing their productive capacities as these policies are important in informing and supporting the regional framework.

The framework, therefore, seeks to leverage and build on the mutually beneficial opportunities available in Member States as well as addressing the common challenge of industrialisation through development of strategies or activities coordinated at regional level.

It builds on the Industrial Upgrading and Modernisation Programme (IUMP), adopted by the SADC Committee of Ministers of Trade in June 2009.

The objective of the IUMP is to enhance the competitiveness of existing industrial capacity and promote the development of regional value chains in selected sectors across the region.

The structure of production in southern Africa is characteristic of a developing region where large shares of Gross Domestic Product (GDP) originate from primary production sectors such as agriculture and mining.

The contribution of these sectors is relatively high, averaging close to 50 percent of GDP. Fishing has equally grown to be important in a number of countries.

However, value addition in these primary sectors remains low, on average remaining at 14 percent of GDP in 2009, according to SADC.

With the exception of South Africa and Mauritius, which have sizeable manufacturing sectors, the SADC industrial sector remains relatively undiversified. In all SADC member states, the manufacturing sector’s contribution to GDP is less than 20 percent and in some cases lower than five percent.

According to the framework, industrialisation intensity is fairly low in the region, with industrial output heavily concentrated on low-technology products such as food, beverages, textiles, clothing and footwear.

In most countries, the contribution of manufacturing to GDP has remained relatively unchanged over the last decade, despite some small upward and downward movements across countries.

The important role played by industrialisation has been recognised in the various SADC instruments and blueprints.

Both the SADC Treaty and the Regional Indicative Strategic Development Plan (RISDP) provide for a development integration approach in SADC that seeks to address production, infrastructure and efficiency barriers to growth and development.

Industrialisation is prioritised in both SADC policy documents as a major tool for sustainable growth, development and eradication of poverty.

The SADC Protocol on Trade, which came into effect in 2000, specifically calls for an industrialisation strategy to accompany implementation of the SADC Free Trade Area. The RISDP adopted in 2003 further re-affirmed the commitment of SADC Member States to a number of priority intervention areas, including development of deliberate policies for industrialisation, with a focus on promotion of industrial linkages and efficient utilisation of regional resources through increased value addition.

The Plan further calls for SADC Member States to pursue national industrial policies and strategies in a manner that fosters regional coherence and reduces regional inequalities.

 SADC industrial policy interventions

The SADC Industrial Policy Framework outlines the following broad cross-cutting and sector-specific interventions for implementation at regional level:

• Developing and exploiting SADC mutually beneficial opportunities;

• Improving standards, technical regulations & quality infrastructure;

• Promoting cooperation on innovation, technology transfer,

and research and development activities;

• Developing mechanisms to improve access to finance for manufacturing and related sectors;

• Improving support for small and medium-sized enterprises;

• Integrating infrastructure and services into the regional industrialisation strategy;

• Attracting local regional and foreign direct investment and promoting exports;

• Developing strategies to exploit opportunities emerging in the region’s strategic cooperation with global partners; and

• Promoting the alignment of this policy framework with existing complementary policies. – SADC Today

March 2014
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