Opinion: Africa Could Easily Be A Global Economic Powerhouse Within 10 Years
In today’s interdependent global economy, Africa is a weak link. The continent is not destined to lag behind the rest of the world economy. On the contrary, it could easily become a global economic powerhouse – and within the next decade, says Li Yong, director general of the United Nations Industrial Development Organization.
Part of Li’s job at the U.N. is mobilize the resources Africa needs to fulfill a U.N. General Assembly resolution that declared 2016-to-2025 the Third Industrial Development Decade for Africa.
To fulfill its economic potential, Africa must industrialize, Li said.
The question is how.
From Project Syndicate. Story by Li Yong, director general of the United Nations Industrial Development Organization.
The short answer is money and action. We must challenge the international community and development partners to back their words with real financial commitments. And we must build partnerships to operationalize programs that will enable Africa to become the world’s next main engine of economic growth.
Such programs must recognize and tackle the acute challenges the continent faces. The economic growth experienced in recent decades has not been structurally driven, sustainable, or fully inclusive. Indeed, growth rates vary widely across the continent, and not all Africans are benefiting.
Unemployment rates are high, especially for young people and women – a reality that drives many Africans to head north.
To keep them home, Africa’s economies must move beyond producing raw materials to build dynamic and competitive manufacturing sectors with higher value added. Here, Africa must draw on the opportunities presented by participation in global and regional value chains. New and innovative industrial-development strategies, as well as carefully tailored measures to attract foreign direct investment, must be introduced.
Of course, to develop such strategies and participate effectively in industrial value chains, Africans need knowledge. Investment in education and skills training is imperative to facilitate successful and lasting industrialization. By understanding and drawing on proven innovations from around the world, Africa could leapfrog more developed countries technologically, building the capacity to produce more sophisticated, higher-value goods.
Knowledge of other countries’ experiences will also help Africa to avoid the pitfalls of unbridled industrialization – particularly environmental damage. Africa must ensure that its industrial-development strategy includes effective environmental safeguards.
Africa is well placed to industrialize. Beyond its massive natural-resource endowments, the continent has a favorable demographic profile (its rapidly growing population means that it will soon have the world’s largest workforce) and high urbanization rates. It also benefits from a highly educated diaspora.
But industrialization is never automatic. Governments must step up to address market failures, while planning, implementing, and enforcing industrial policies that address the shortcomings of previous ineffective versions. They must then institutionalize these new policies in national and regional development strategies.
A recent report, prepared for the Hangzhou G20 Summit, features a number of recommendations for Africa. It suggests:
- Support for agriculture and agribusiness development, linking them with other sectors.
- Measures to boost resilience to price shocks.
- The need to deepen, broaden, and update the local knowledge base.
- Invest in energy- and material-resource efficiency.
- Promote green technologies and industries.
- Other recommendations relating to trade and regional integration, leveraging domestic and external finance, and promoting what it calls the “New Industrial Revolution.”
Africa is committed to industrialization. In fact, the process is already underway in many countries, including Ethiopia, Ghana, Rwanda, and Senegal. By offering our commitment and support, we can enable these countries to realize inclusive and sustainable development for the benefit of everyone.
Read more at Project Syndicate.
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