Third Industrial Development Decade for Africa: Enhanced and innovative global partnerships key to a successful AfCFTA
High-level event on Enhancing global partnerships for IDDA III held on the margins of the 73rd UN General Assembly in New York
Heads of States, high-level representatives of governments, development financing institutions and UN agencies together with representatives of the private sector, non-governmental organizations and academia met today at the United Nations Headquarters to discuss how inclusive and sustainable industrial development can support the implementation of the African Continental Free Trade Area (AfCFTA) agreement.
The event was organized by the United Nations Industrial Development Organization (UNIDO), the African Union Commission (AUC), the African Development Bank (AfDB), the United Nations Economic Commission for Africa (UNECA), and the Food and Agriculture Organization of the United Nations (FAO).
In the next decades, Africa is set to become the youngest and most populous continent in the world, with a working age population expected to grow by around 70 per cent to number 450 million people by 2035. Job creation in Africa is not keeping pace with the growing workforce and large parts of the rural population, the urban poor, women and youth have not benefited from recent economic growth. Unemployment and inequality still remain unacceptably high.
Policymakers now acknowledge that the continent’s economies need to undertake a systematic structural transformation from resource-based economies to more diversified economies, specifically by increasing the shares of manufacturing and agro-related industry in national investment, output, and trade.
The AfCFTA, launched by the AUC in March 2018 in Kigali, Rwanda, has enormous potential for catalyzing this structural transformation, as it will spur industrialization, economic diversification and employment in Africa. It will create a continental market of 1.2 billion consumers and an African GDP of US$2.5 trillion, and is expected to provide great business opportunities for trading enterprises, businesses and consumers.
Welcoming the audience, Amina J. Mohammed, Deputy Secretary-General of the United Nations, highlighted that “real output growth is estimated to have increased by 3.6 percent in 2017, up from 2.2 percent in 2016, and is poised to accelerate to 4.1 percent in 2018 and 2019,” and added that, “despite this positive economic growth, challenges remain for the achievement of meaningful inclusive and sustainable industrial development for Africa.”
Addressing the New York meeting, LI Yong, the Director General of UNIDO, which is leading the implementation of the Third Industrial Development Decade for Africa (IDDAIII), said that, if the full benefits of the AfCFTA are to be fully realized, industrialization should be the central focus. He predicted that “the successful implementation of the AfCFTA will lead to an increase in demand for goods manufactured by small and medium-sized enterprises.”
Also, the African Union Commissioner for Trade and Industry, Ambassador Albert M. Muchanga, emphasized that “the African Continental Free Trade Area and IDDAIII are complementary, and the alignment will offer win-win outcomes to Africa and the international community.”
All speakers agreed that for the implementation of the AfCTFA to be sustainably successful it will necessarily require further enhanced and concerted efforts by all international and national stakeholders – especially through innovative global partnerships on a multilateral level.
Pierre Guislain, Vice President of the African Development Bank, said that “the private sector has a critical role to play in driving Africa’s industrialization and integration”.
He added that “boosting intra-African investment was as important as boosting intra-African trade” and called on governments “to accelerate adoption and implementation of the AfCFTA and create truly integrated regional markets that have the scale needed for large private investments”. He indicated that industrializing Africa is one of the African Development Bank's top five lending priorities.
Vera Songwe, Executive Secretary of the UNECA, stressed, “if the AfCFTA is to catalyze Africa’s industrialization through integrated markets then bridging infrastructure gaps and digitalizing economies across the continent is critical!”
Noting that the AfCFTA and industrialization strategies will need to exploit the full agribusiness potential of the continent, José Graziano da Silva, Director-General of the FAO, said, “agro-industrial development that connects family farmers, herders and fisher folks to rewarding markets can create opportunities for young people, stimulate greener practices throughout the food system, and deliver healthier and safer food to consumers.”
During the event, it was announced that the following heads of state had agreed to become IDDA III Champions to actively promote the role of inclusive and sustainable industrial development within the IDDA III framework and to increase awareness of this important initiative at the national, regional and global level:
His Excellency Alassane Ouattara, President of the Republic of Côte d’Ivoire;
His Excellency Uhuru Kenyatta, President of the Republic of Kenya;
Her Excellency Marie-Louise Coleiro Preca, President of the Republic of Malta;
His Excellency Mahamadou Issoufou, President of the Republic of Niger;
His Excellency Macky Sall, President of the Republic of Senegal;
His Excellency Matamela Cyril Ramaphosa, President of the Republic of South Africa; and
His Excellency Edgar Chagwa Lungu, President of the Republic of Zambia.
Deputy Secretary-General says positive economic growth sign of Africa’s strong potential
Following are UN Deputy Secretary-General Amina Mohammed’s remarks at the high-level event on the Third Industrial Development Decade for Africa, in New York today:
I am pleased to join you today as we focus attention on Africa’s industrial and socio-economic development. I am encouraged by the presence of so many high‑level representatives from both the public and private sectors.
This year’s event comes when Africa’s economic growth is beginning to recover after the decline witnessed in 2016. Real output growth is estimated to have increased by 3.6 per cent in 2017, up from 2.2 per cent in 2016, and is poised to accelerate to 4.1 per cent in 2018 and 2019. This is indeed welcome news and a reflection of the continent’s strong potential.
However, despite this positive economic growth, challenges remain for the achievement of meaningful, inclusive and sustainable industrial development for Africa. The diversification of African economies through value addition is essential for sustainable growth, market resilience and withstanding economic shocks.
To that end, we welcome the launch this year of the African Continental Free Trade Area. This will constitute the world’s largest free trade area in terms of membership and will also create a single market of 1.2 billion people with a combined gross domestic product (GDP) of over 2.5 trillion dollars, which is expected to double by 2050.
Sustainable industrialization is key to the success of the Free Trade Area, with an emphasis on inclusive development that harnesses the energy, drive, creativity and skills of women and youth.
Within the framework of the Third Industrial Development Decade for Africa, commendable efforts are being undertaken by different stakeholders, including within the United Nations. We have a roadmap for its implementation that will form the basis for joint programmes between United Nations agencies and key stakeholders.
This and other achievements are captured in the progress report on the Decade that will be presented to the General Assembly.
Going forward, I would like to highlight five areas for special attention.
First, congruency between alignment and cohesive regional and industrial policies. Trade and industry policies that talk to each other are much more likely to yield positive results than those implemented in isolation.
Second, enhanced focus to investments on infrastructure development. This includes special economic zones and industrial parks, roads, ports, harbours, energy infrastructure, information and communication technologies and digital infrastructure.
Third, enhanced value addition local contacts, with a focus on agriculture and other natural resources. As the mainstay of most African countries, these hold the key for accelerated sustainable growth, diversification and job creation.
Fourth is trade capacity building to facilitate fuller participation in regional and global value chains. Being at the table needs muscle capacity to engage and negotiate the best deals for your country.
And fifth is human capital development and technology with a focus on women and youth to ensure inclusive development.
It is also clear that the agendas set out in the Industrial Development Decade and the African Continental Free Trade Area cannot be achieved by any single entity or country. There is a need to build and strengthen partnerships among all relevant stakeholders.
Finally, creating a space for these partnerships to focus on five areas mentioned and addition, encouraging technology transfer, building productive capacity, creating jobs, promoting international trade, supporting economic diversification, and building green industries.
Creative and innovative approaches must continue to be deployed to mobilize both financial and non-financial resources.
Maximizing financing for development means a number of things. We must mobilize domestic resources alongside international financial resources. We need to harness the role of the private sector in financing development. And we must maximize the use of innovative financing sources and mechanisms including pension funds, insurance and other large pools of private capital.
To do this, it is vital that we share experiences and lessons among countries. We also need to leverage and deepen strategic North-South; South-South and Triangular cooperation.
On behalf of the United Nations, I reaffirm our continued strong commitment and action to sustainable development on the continent and ensuring an inclusive, resilient, and secure future, for all Africans.
I wish you a productive meeting.
- High-level Event on Enhancing global partnerships for IDDA III – Key for successful implementation of the AfCFTA: Concept note
- UNIDO Roadmap: Implementation of the Third Industrial Development Decade for Africa (2016-2025)
- Third Industrial Development Decade for Africa (2016-2025): Resolution adopted by the General Assembly on 25 July 2016