adminGolden Sibanda recently in Victoria Falls
GOVERNMENT and State institutions should take the lead role in the accelerated industrialisation and transition of Sadc economies from exporting primary products to value added goods and knowledge based economies, the United Nations Economic Commission for Southern Africa (Uneca) has said.
Uneca said State institutions such as the Industrial Development Corporation, in Zimbabwe and South Africa, could lead the industrialisation and economic transformations of economies in Southern Africa. The two State entities occupy an expansive spectrum of sectors.
The commission made the call in a research paper presented during the commission’s 21st session of intergovernmental committee of experts meeting in Victoria Falls from March 12 to 13, 2015 at Kingdom Hotel and adopted by all the 11 member states at close of the session.
The thinking falls in line with the Southern African Development Community’s Industrial Development Policy Framework, which places development of manufacturing industry at the core of the region’s integration agenda.
Deliberations during the ICE meeting of Uneca’s Southern Africa sub-regional member countries were held under the theme “accelerating industrialisation in Southern Africa Through Value Addition and Beneficiation”.
Only in August last year the Sadc Heads of State Summit, chaired by President Mugabe, further underscored the importance of industrialisation in the socio-economic transformation of the region before wholesale liberalisation and set targets on development of a regional strategy.
The drive towards industrialisation through value addition and beneficiation of the region’s abundant natural resources comes amid the realisation that more value could be derived from value chains of processing and that poverty and inequality had persisted despite impressive growth. As such, industrialisation is targeted alongside inclusive growth.
Uneca also said the majority of Southern Africa’s mineral-rich states were not only earning the minimum from their resources, via the export of unprocessed ore, but were also limiting employment benefits, wealth diversification and leaving themselves vulnerable to the fluctuations of the global resource markets, which has negatively impacted growth of their economies.
“The role of the State and state institutions is particularly important in navigating the transition from commodity exporters to knowledge economies.
“State investment can underpin the operating framework for industrialisation to allow the private sector to drive industrialisation and cluster development.
“State institutions such as research centres and development corporations such as Industrial Development Corporation in South Africa and Zimbabwe should play a much more active role especially in starting up new enterprises that add value to national resources,” said Uneca.
It is believed that State entities can contribute about 40 percent of a nation’s gross domestic product.
In Zimbabwe, while Government is actively pursuing various initiatives to regenerate the industrial base and make it globally competitive, State enterprises have continued to be a huge disappointment due their poor performance year in year out to the extent of being a liability on the fiscus.
Such institutions include power utility Zesa Holdings, fixed network operator NetOne, national carrier Air Zimbabwe, national rail operator National Railways of Zimbabwe, State enterprises Industrial Development Corporation, roads authority Zimbabwe National Roads Authority and water authority Zinwa; key enablers for economic growth.
Uneca said continued innovation and human resources development were key to reducing the dependence on countries’ natural resources and to building and sustaining a locally embedded, competitive and diversified economy as well as moving towards a knowledge-based economy.
The study identified the constraints to value addition and beneficiation and value chains development to include: lack of raw materials, skills shortages, lack of finance, limited cooperation for larger markets, technological challenges, poor infrastructure and lack of policy harmonisation.
Profiling of beneficiation and value addition opportunities in Sadc would allow member States to focus on areas where they have full comparative advantages and decide the stage of the value chain which they can occupy.
The beneficiation potential of minerals and agricultural products needs to be fully understood and the boundary conditions for such a strategy on a commodity by commodity basis determined. The profiling would investigate strengths of the productive capacities and the commodity markets.
This is informed by the Regional Indicative Strategic Development Plan (RISDP), which among others, advocates the “…diversification of regional economies through, inter-alia, industrial development and value addition.”
Bongani Moyo
Online Reporter