Between 30 July and 4 August 2017, delegates from the media; private sector; civil society and public sector from the Southern African Development Community (SADC) Member States met in Sunninghill, Johannesburg (South Africa) during the Second Annual SADC Industrialization Week.

The Sunninghill Declaration has been prepared by Members of the Southern Africa Business Forum (SABF) – a regional public-private sector platform housed at the NEPAD Business Foundation, aimed at amplifying the voice of regional businesses in dialogue with the public sector in SADC Member States (coordinated by the SADC Secretariat).

---

The SADC Region Prepares for Industrialization

During the conferences and seminars of the second SADC Industrialization Week, 31 July to 4 August 2017, the regional private sector, civil society and research community, international cooperating partners and development finance institutions gathered in Sunninghill, Johannesburg to interact with SADC Member State government representatives. The theme of SADC Industrialization Week 2017 was Partnering with the Private Sector in Developing Industry and Regional Value Chains.

In planning for SADC’s industrialization, encapsulated in the Regional Indicative Strategic Development Plan (RISDP), the SADC Industrialization Strategy and Roadmap, and the SADC Industrialization Action Plan, the fourth Industrialization revolution (Industry 4.0) concepts will no doubt play a significant role.

Industry 4.0 refers to digital transformation, including big data, digital printing and the Internet of Things; all of which will have a profound effect on manufacturing, the future of work, skills requirements and value chains. However, the greater automation and digitization, higher technology and greater connectedness will drive new approaches and innovative business models which must focus on sustainable and efficient use of limited resources and the costeffective production of user-driven products.

While industrialization largely focuses on manufacturing, the role of the services sector and capacities and capabilities in supporting the manufacturing process are important components of economic development. Besides the fact that services such as ICT and transportation are essential for trade, services can contribute to firms becoming more productive. For example, through the use of services (e.g., logistics, management and engineering), time, materials and resources can be more efficiently and effectively used, and coordination across the entire value chain can be improved.

There is therefore a call on governments, development finance institutions, international cooperating partners and private sector (small, medium and large companies, and financiers) to recognise the challenges and opportunities inherent in adopting Industry 4.0. In order to do so, it is necessary to identify new policy challenges and opportunities; preparing a range of ‘futureproofed’ policies and strategies that are more resilient in a time of rapid change and rising uncertainty.

Looking Back

The Esibayeni Declaration of 2016 emerged from Swaziland’s SADC Industrialization Week as the private sector’s outcomes statement from the SABF Conference. The messages from the Esibayeni Declaration can be summarised as follows:

1. Hard and soft infrastructure shortcomings must always be addressed together. Hard infrastructure is only as useful as the regulatory environment that surrounds it, and either permits or hampers its utilization.

2. Policy certainty, including stability, predictability, consistency and transparency is a prerequisite to attract investment for regional industrialization, regardless of sector or scale. Large companies and SMEs from all sectors demand policy certainty regarding the use of tariffs, fees and levies at borders; mining houses and agro-processors called for stable and predictable export regimes; and infrastructure developers and agro-enterprises raised the need for consistent and transparent land use rights.

3. Prioritization and sequencing is the key to successful implementation. Prioritization should take into account geographical links, opportunities for incremental implementation to allow for short-term gains, and industry-specific requirements to support priority value chains.

4. Enabling trade through the removal of non-tariff barriers, coordinated border management and a solid regional transit system is a prerequisite for industrialization in all sectors.

Key Points of the Sunninghill Declaration

Reiterating the messages of the Esibayeni Declaration of 2016, the private sector through the Sunninghill Declaration 2017 additionally makes the following assertions and recommendations:

1. Conventional policy approaches are not always appropriate for rapidly changing conditions. Responsible policy-making requires:

   • Considered research and groundwork,

   • Taking into account the evolving regional political economy.

2. There is the need to acknowledge the inequalities that exist within Member States, and particularly between Member States in the SADC region.

   • Only through genuine deeper regional integration, smaller and weaker economies can overcome their vulnerabilities and limitations by pursuing different strands of specialization along specific regional value-addition chains.

3. Regional protocols, strategies and plans must be implemented at domestic level, subject to the sensitivity to the changing socio-political, economic and technological environments.

   • Member State governments should work in collaboration with partners – inter alia but not limited to private sector, civil society, universities, centres of excellence, academia, think tanks, media, international cooperating partners, chambers of commerce, business associations, investment agencies, standards organisations and the SADC parliamentary forum – to ensure successful domestic implementation of the SADC regional industrialization and integration programmes in all SADC Member States.

   • Different non-state actors have numerous similar challenges, and in this vein, Annex I of this Declaration presents a Joint Position Paper of Issues Affecting Regional Business and Civil Society.

4. It is essential to develop common awareness among the public and private sectors on the main elements of ‘quality infrastructure’ for SADC (and the African context), assessing the net long-term benefits and trade-offs.

   • This common awareness should include standards of efficiency, safety and resilience, environmental, and social and gender inclusion. Sharing of experiences and good practices among all stakeholders for integrating these concepts throughout the project cycle is encouraged.

   • As the expectation is that transport infrastructure (rail, road and ports) will assist to drive development of businesses and processing in the region; so priority must be given to make freight and border rates globally competitive.

5. A dearth of information discourages particularly micro, small and medium enterprises (MSMEs) from participation in regional and global value chains.

   • An active exchange of information should be facilitated between governments, private sector and their intermediaries (including chambers of commerce, business associations, and investment agencies).

   • These information exchanges should include guidelines on accessing finance; cross-border payment systems; international trade and investment opportunities; and progress on trade facilitation reforms for instance, relating to government commitments to the WTO Trade Facilitation Agreement.

SADC Value Chain Development

SADC has placed industrialization and value chain development at the centre of its regional integration and economic development strategies. Furthermore, SADC Member States have acknowledged the critical role that the private sector plays in industrialization and that effective partnering with private sector will achieve the realization of regional value chains. It is against this background that the theme for the 2017 Industrialization Week was ‘Partnering with the Private Sector in Developing Industry and Regional Value Chains’.

---

Additional conference documentation can be downloaded here, after registration.