adminKudzanai Gerede
REALISING one’s comparative advantage in the global economy is the cog for industrial transformation for Southern African Development Community member states, African Development Bank Resident Representative Mr Mateus Magala has said. Addressing business associations’ representatives from SADC region in Harare this week, Mr Magala, said diversification of industries was important in widening Government revenue base and also as a precautionary measure in case of risks and shocks, but there was a need to focus more on one’s comparative advantage for the transformation process to begin.
“Realising your comparative advantage in this global economy enables an economy to position itself as a hub for that essential commodity it has a comparative advantage upon and its industrial transformation cannot take place without foreign direct investment into the private sector,” he said.
He called for the need for sincerity, trust and cohesion between private and public sector partnerships in the acceleration of industrial transformation, citing the pivotal role of the private sector on the continent.
Private sector generates 70 percent of Africa’s exports, 70 percent of the continent’s investment and 90 percent in employment capacity.
“Having a comparative advantage is meaningless unless that commodity undergoes value addition and beneficiation for its locals. It brings the importance of creating linkages with other regional members and creates downstream industries in the value chain which stimulate economic activities in the region and still control the chain to your advantage as the source of the commodity.
“Exploiting SADC’s commodities for industrialisation involves adding value and developing linkages,” he added.
He further advised on the need for business entities and governments in the region to subscribe to a $15 million membership fee for trade insurance with the ADB as the region was losing half a billion dollars annually in damages and loses in cross border trade through various means such as road carnages, corruption and theft among other incidences.
He also bemoaned lack of emphasis on vocational training, which is evident in young Africans’ preference for university degrees in a region where more still need to be done on the industrialisation aspect of the economy focusing on skills development to sustain the industrial transformation citing Kenya’s strides in the Information Communications Technology (ICTs) industry, ascertaining itself as the region’s ICTs hub.
Managing director for Banking Association South Africa Mr Cas Coovadia said tax revenues in the SADC region were generally very low compared to what was being produced locally which was not sustainable for economic growth, pointing to mistrust and corruption between public and private sector engagement.
Angola for instance, receipts 1,4 percent revenue of its total GDP per year.
British American Tobacco managing director Mr Lovemore Manatsa said Government was losing millions of dollars per year due to the smuggling of cigarettes by middlemen due to the porosity of the country’s borders.
The conference came at a time when SADC heads of states are meeting in the capital, mapping a way forward on the positioning of the private sector in industrial development, beneficiation and value addition to natural resources with the business community anxious on whether the long hyped free-trade agreements will finally be implemented.
Online Reporter