‘Manufacturing Is an Answer to Poverty in Africa’ UN Report
July 12, 11UN report calls "well-designed approach to industrialization" such as diamond polishing in Botswana |
The Economic Development in Africa Report 2011 calls for “a practical, well-designed approach to industrialization that is adjusted to specific country circumstances and based on extensive discussion with and feedback from businesses and entrepreneurs.”
The report, released Monday by the UN Industrial Development Organization (UNIDO) and the UN Conference on Trade and Development (UNCTAD) added that Africa cannot realistically hope to reduce widespread poverty if its governments don’t take effective measures to expand this vital economic sector.”
The report says that Africa is losing ground in labor-intensive manufacturing – which is generally the entry-level step in industrial development.
Strategies to spur industrial development – in order to be effective – must be individually tailored by governments, which need to support to private firms to steer investment and business activities into areas of industry critical for long-term economic growth.
That is the policy that led to creating diamond-manufacturing facilities in several diamond producing countries. Botswana, according to the report, stands at a slightly higher industrialization level but heavily dependent on resource-based manufacturing. “Manufacturing value added (MVA) accounts for only 4% of its GDP.”
To reap the full benefits of industrial development, countries such as Botswana should consider substantially increasing their efforts to support manufacturing activities and simultaneously start to build the basic technological capabilities that are essential to move to more technology intensive sectors at a later stage.
The report further calls for building effective state-business relations such as improvement in roads, railroads and electricity supplies and “putting into place a mechanism for monitoring, evaluation and accountability.”