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Business News of Saturday, 19 June 2021

Source: GNA

Africa needs to industrialise to create jobs – Wamkele Mene

AfCFTA Secretary-General, Wamkele Mene AfCFTA Secretary-General, Wamkele Mene

Mr Wamkele Mene, Secretary-General, Africa Continental Free Trade Area (AfCFTA), has reiterated that Africa needs to industrialise to create jobs for the people.

He said Africa’s population was young and growing fast, with a population of about 1.3 billion, it was the second highest after Asia.

Speaking at the honorific public lecture, Mr Mene informed that due to the rapid rural-urban migration, the population in cities would triple by 2050.

The leacture, in honour of Daniel M.C. Korley at the University of Professional Studies, Accra (UPSA), was on the theme, “Creating the Next Generation of Entrepreneurs Through AfCFTA”.

Speaking on the topic, “The AfCFTA and the New Age of African Enterprise,” Mr Mene said it was estimated that the African labour force would swell by more than 170 million people between 2010 and 2020.

“If there are no productive jobs for these people, the fight against poverty will be lost given that the most important determinant of whether someone in Africa is in poverty, or not, is whether they have a job,” Mr Mene stated.

He said indications were that 10 to 12 million young Africans join the labour force each year, yet the continent creates only 3.7 million jobs annually.

He said by 2035, more young people would be entering Africa’s workforce each year than in the rest of the globe combined, according to the International Monetary Fund (IMF).

He said many countries, businesses and organisations had begun to address this problem, using tools from progressive policy-making to innovative finance, adding that however, over 60 per cent of young people across Africa still remain unemployed.

Mr Mene argued that industrialization was crucial for African countries to transform their economies, create jobs, add value and promote trade through greater integration into regional/global value chains.

He said Africa, despite failing to industrialize in the past, might have a new window of opportunity.

This, he said, was due to the convergence of three factors - new technologies associated with the Fourth Industrial Revolution (4IR); a resurgence of start-up entrepreneurship in Africa; and the launch and commencement of the AfCFTA.

He said until the economic fallout of the Covid-19 global pandemic pushed Africa into its first recession in over 25 years in 2020, the continent had experienced a steady and unprecedented economic growth since the early 2000s.

He reiterated that unemployment and inequality had, however, remained high.

He said the rural population and the urban poor, women and youth, had not benefited from economic growth, stating that for the benefits of growth to be shared by all, there needed to be a structural transformation of the economy.

He said in this regard, industrialization was crucial for African countries to transform their economies, add value and promote trade through greater integration into regional/global value chains.

Mr Mene said when countries in North America, Western Europe and Asia experienced similar demographic pressures in their past, industrialization enabled them to create jobs and welfare simultaneously. “Indeed, the African Union (AU)’s Agenda 2063 recognizes industrialisation as essential for the realization of the goal of ‘A Prosperous Africa Based on Inclusive Growth and Sustainable Development,” he said.

Adding that, industrialisation features prominently in the AU’s First Ten-Year Implementation Plan (2014-2023) and earlier in the AU’s “Action Plan for Accelerated Industrial Development of Africa.”

He said Africa’s industrialisation policies rested on manufacturing, “thanks to its multiplier effect on other sectors of the economy.”

Mr Mene said manufacturing was the “engine of growth” which enhanced higher levels of productivity and greater technical change, thus creating more jobs with higher wages for both women and men.

He said however, “industrialisation in 21st century Africa calls for innovative strategies that go beyond sectoral approaches that target only manufacturing. Africa can industrialise by promoting all economic sectors that have potential for high growth and employment creation.”

He said certain tradable services and farming activities such as horticulture and the agro-industry production methods, for instance, had become comparable to those of conventional manufacturing.

He said those activities produced higher quantities of goods (at lower marginal costs) which could then be exported, increasing competition and productivity.

He said the potential of non-manufacturing sectors for industrialisation became more important in the context of the Fourth Industrial Revolution, where robots tended to replace low-skilled workers in manufacturing activities.

Thus, Africa’s innovative industrialisation strategies should include high-potential entrepreneurial activities to achieve outcomes.

He said start-ups and small and medium-sized firms with high-potential can complement the growth of large companies in driving Africa’s industrialisation.