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Business and Development

Africa Industrialization Day: How Can We Promote Industrialization In Africa?

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Image for Africa Industrialization Day. Image source, World Bank Blog

Between the 1920s and 1940s, Agriculture was one of the main industries in the world. Since many African countries depend largely on Agriculture, the continent was able to gain from the era. However, from the 1990s onward, industrialization had a new meaning.  Manufacturing is now the biggest industry in the world. Inasmuch as Africa has ample raw materials, converting them into export products is still a challenge. Africa Industrialization Day is a reminder of the need to transform Africa from a consuming continent to a manufacturing continent.

Africa presents an excellent opportunity for investors to start and grow their industries. This is because Africa has enormous human and natural resources. Industrializing Africa is possible but faces lots of challenges. This ranges from political instability to lack of stable power and access roads. Therefore, putting the structures in place for the smooth running of an industry is always financial intensive. So, how can we promote industrialization in Africa and make the continent more profitable? 

The Date for The Celebration 

The United Nations General Assembly announced 20th November for celebrating and raising international awareness of the Africa Industrialization Day. Its A/RES/44/237 document indicates that the United Nations took this decision in its 85th plenary meeting on 22nd December 1989. Beginning in 2018, the celebration of the African industrialization day has witnessed tremendous progress. The annual event lasts over one week. The 2020 event will run from 16th to 20th November.

The Theme for Africa Industrialization Day 2020

Africa Industrialization Day 2020 will focus on industrialization, the African Continental Free Trade Area (AfCFTA), and COVID-19. The theme for the celebration is “Inclusive and sustainable industrialization in the AfCTA and COVID-19 era“. The African Continental Free Trade Area (AfCTA) was scheduled to kick off this year. However, that has been stalled because of the devastating effect of COVID-19. It makes sense to consider how to restructure the trade agreement for future eventualities. 

To date, the AfCTA is one of the boldest attempts to encourage industrialization in Africa. Subsequently, countries with good manufacturing industries are the ones that will benefit more from the free trade agreement. According to Tralac, the COVID-19 global pandemic disturbed the AfCFTA trading commencement date of 1st July 2020. The new commencement date for trading is 1st January 2021.  

The Importance of the African Industrialization Day

The importance and benefits of Africa Industrialization Day are numerous. Firstly, through this celebration member states in the African Continental Free Trade Area agreement are encouraged in their commitment to improving local industrialization. In the long-run, Africa should get to the point where we are self-sustaining. One thing is clear, the industrialization of Africa will help to create jobs for the young population. 

Secondly, the Africa industrialization day is a reminder to Africa to develop policies that resonate with the reality of the 21st century. Also, it highlights the need for the government to create an enabling environment and support for industries. The COVID-19 pandemic exposed the vulnerability of various industries we once thought were invisible. Unlike in the United States and Europe where the government shared bailout to vulnerable industries, in Africa industries were left to fight for their survival. Perhaps, this year’s African industrialization Day celebration will encourage necessary changes and reviews to industrial policies.

Ways to Promote Industrialization in Africa

Here is an example to further buttress the importance of industrialization. About 70 percent of the world cocoa beans come from four West African countries namely Cameroon, Ghana, Ivory Coast, and Nigeria. However, the price of cocoa per metric ton is only about $2,200 as of 2019. Interestingly, the chocolate industry is worth more than $100 billion. If Africa had the right industries, they can convert their cocoa into chocolate and tap into this $100 billion global industry.

Corporation and unity between African countries is the first step to enhancing industrialization. The African Development Bank dictates six flagship strategies. The following points highlight some of the ways to boost industrialization in Africa. 

Digitalization

Sadly, many African countries run analog systems and the consequences are dire. Firstly, analog systems are more prone to errors and hinder accountability. The increase in digitalization in African industries is not yet optimal despite the fact that some researches and studies have shown a positive trend. upgrading from analog to digital systems are quite expensive. However, they are worth every penny because of their tendency to speed up production and improve the quality of the product. 

Image for Africa Industrialization Day. Image source, Pixaby

Industrial plant

Inasmuch as some African countries have industries, they cannot export their products because of poor quality. At other times, due to the analog manufacturing process, they are unable to produce the right quantity that will make export attractive. To promote African industrialization, the continent must operate in line with the technologies of the 21st century. Automation in large manufacturing plants is paramount. 

Tariff Reduction

Industrialization in many African countries is unattractive because of the high tariffs. Taxation also plays a role in stiffening the participation of foreign investors in African economies. Thankfully, some African countries are realizing the importance of granting tax waivers to certain industries to promote their growth. Elimination of exorbitant tax is one of the recipes for better African industrialization.  

Policy Amendment

Policies have a significant effect on the operation of industries and its stakeholders. African countries can have policies that mandate the industries to source a certain percentage of their raw materials locally. This is one of the ways of making sure that African industrialization doesn’t stifle the agricultural industry, rather, to complement it. Sadly, many African countries have policies that make it difficult to start and grow an industry because of bureaucratic bottlenecks. If there are policies that will simplify the process of acquiring lands and business registration, it will definitely go a long way to encourage industrialization in Africa. 

Skill Development

For African Industrialization Day to achieve its goal, the governments of different African countries need to invest in skill development. Industrial machines are rapidly evolving and you need a population that is in tune with every technology. Sadly, inasmuch as Africa has a large young population, many of them lack the skills to take on more advanced industries.

Image for Africa industrialization day showing Agricultural development

Mechanized agriculture

Building Infrastructures

African countries are showing great signs in terms of infrastructural innovation. This comes in the form of Specialized Economic Zones (SEZs). A good example of this is found in Ethiopia. This allows industries to easily share materials and resources. It also ensures that industrial structures are not located in residential areas. This helps prevent noise pollution in residential areas. Despite the good news, Africa has a long way to go regarding infrastructures including creating stable electricity and access roads. To promote industrialization in Africa, it is mandatory to focus on building quality and strategic infrastructures.   

Conclusion

African Industrialization Day is a celebration that every African should take seriously. Clearly, promoting African industrialization will help the continent to reach its full potential. Through industrialization, Africa can achieve sustainable economic growth that will reduce its reliance on other countries. These solutions sound straightforward. However, what is stopping African governments from implementing them? Feel free to share your thoughts in the comment box below. 

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