SADC Industrialisation Strategy and Roadmap
The SADC Industrialization Strategy and Roadmap, 2015-2063, was approved by the Extra-Ordinary Summit in Harare, Zimbabwe, in April 2015. The Strategy is premised on the conviction that regional integration will promote industrialization. It recognizes that industrial policy and implementation will be largely undertaken at the national level and that its success depends on forging a compact for industry consisting of the government, the private sector, civil society, labour and the development partners.
The SADC Industrialization Strategy and Roadmap seeks to engender a major economic and technological transformation at the national and regional levels within the context of deeper regional integration. It also aims at accelerating the growth momentum and enhancing the comparative and competitive advantage of the economies of the region.
This entails the pursuit of a focused programme for the accumulation and deployment of knowledge, modern physical assets and human capital, particularly the youth as well as other capabilities. A transformed economy has greater promise for substantially raising living standards, generating employment, alleviating poverty and mitigating external shocks.
In the 21st century, SADC economies can no longer rely on rich resources or low-cost labour as a platform for industrialization and modernization. The strategic thrust must shift from factor accumulation growth – employing more labour and investing more capital – to total factor productivity, which is the efficiency with which resources are deployed in the production process. Catching up is dependent on narrowing productivity gaps both between sectors within SADC economies and with more advanced economies, necessitating a focus on advanced skills and state-of-the-art technologies. The fact that 60 per cent of world trade is in intermediate products strengthens the case for value-addition in SADC economies and value-chain participation.
The Strategy is designed as a modernization scheme, and is predicated on maximum exploitation of comparative advantage and creating enduring conditions for competitive advantage at enterprise level. The latter thrust requires earnest efforts aimed at enhancing technological setups and readiness, changes in the way of doing business, scaling-up productive capacity and enhancing economic interlinkages to unlock regional potential in general. Sustainability of the process would thus require turning the economies into knowledge-based and competitive structures. Such efforts, while requiring quality changes in a wide range of policies and actions, indeed recognize, and build on, the efforts already made nationally and regionally.
Industrial policy must be crafted within the context of a country’s competitive advantage, including future or nascent advantage. The essence of transformation is diversification via upgrading and climbing the technology ladder. Successful industrialization will be achieved not just by doing things better – though that is a key factor – but also by doing different things, implying industrialization is achieved through diversification.
The SADC Industrialization Strategy and Roadmap 2015-2063 has a long term perspective, and is aligned to national, regional, continental and international dimensions. The Regional Strategy is driven by national development strategies, visions and plans and primarily by the SADC Treaty, the RISDP, SADC protocols and specifically by the Industrial Development Policy Framework (IDPF). It is also informed by African Union’s Accelerated Industrial Development of Africa and Agenda 2063. The Strategy recognizes that for trade liberalization to contribute to sustainable and equitable development, and thus to poverty reduction, it must be complimented by the requisite capacities to produce, and to trade effectively and efficiently.
The primary orientation of the Strategy is the importance of technological and economic transformation of the SADC region through industrialization, modernization, skills development, science and technology, financial strengthening and deeper regional integration. Industrialization should be seen as a long-term process of structural transformation and enhanced competitiveness of the entire SADC region. The SADC region is in catch-up mode and needs to run faster than other emerging economies to converge with upper middle-income and high-income countries.
The Strategy is anchored on three pillars namely; industrialization as champion of economic and technological transformation; competitiveness as an active process to move from comparative advantage to competitive advantage; and regional integration and geography as the context for industrial development and economic prosperity.
The Strategy’s long term vision is aligned to the African Union Agenda 2063, covering the period 2015-2063. During this period, SADC economies seek to overcome their development constraints, and progressively move from factor-driven; to investment-driven, then to efficiency-driven; and ultimately to the high growth trajectory driven by knowledge, innovation and business sophistication. It is envisioned that by 2063, the SADC region will be fully transformed and will be an important player in the continental and global landscape, premised on the three growth phases:
Phase I: covers 2015 to 2020. This period constitutes a period of active frontloading of the Industrial Development and Market Integration and related infrastructure and services support to industrialization, with interventions to strengthen integration and competitiveness. During this phase, SADC countries should target per capita income growth of about 6 percent annually to achieve the lower income band of the factor-driven stage of US$ 2000.
Phase II: covers the period 2021 to 2050, will focus on diversification and enhancement of productivity and competitiveness. During this period, SADC aims to achieve the targeted GDP per capita of US$ 9000 by 2050 and a per capita growth rate of 8 per cent annually from 2020 onwards.
Phase III: covers 2051 to 2063, during which SADC economies would move into the innovation-driven stage, characterized by advanced technologies and increased business sophistication. To achieve that status, GDP per capita would need to rise from US$ 9000 in 2050 to US$ 17000 by 2063, with an annual income growth of about 5 per cent.
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