UN-AU report calls on Africa to refocus on industrialization

A new report released Friday by the United Nations and the African Union (AU) called on the continent of Africa to refocus its economic development strategies on industrialization, particularly on the means for formulating and implementing effective industrial policy. The Economic Report on Africa 2014, issued here at the UN Headquarters in New York, said that transforming Africa's industrial landscape has failed partly because countries used industrial blueprints characterized by lack of dynamism and high level coordination, as well as inadequate consultations with stakeholders. The report, jointly produced by the UN Economic Commission for Africa (UNECA) and the AU Commission, builds on the work of the 2011 edition -- on the role of the state in economic transformation -- as well as last year's report on leveraging Africa's comparative advantages in commodities to industrialize. Until now, the report said, an examination of Africa's failure at industrialization had ignored the policy processes and institutions governing industrial policy in Africa or the impact of their inherent weaknesses on industrialization. "Indeed, weak institutional structures and poor policy design have been at the root of Africa's industrial policy problem throughout its post-independence history," the report said. The theme of this year's report is "Dynamic industrial policy in Africa: innovative institutions, effective processes and flexible mechanisms." While acknowledging Africa's impressive economic growth in the past decade on the back of better commodity prices, improved governance and increasing domestic demand and trade and investment ties with emerging economies, it said that industrialization is a "precondition for Africa to achieve inclusive and sustainable economic growth." Beyond an analysis of the continent's industrialization problems, and based on the experience of industrializing countries in the global south, the report offered an institutional framework for designing and implementing industrial policy in Africa. The report recommended that top-level coordination of the industrial policy framework is required to deal with potential problems that could undermine the efficiency of industrial policy. Making provision for dialogues between public sector and private stakeholders allows governments and the industrial policy organizations to be adaptable to the changing needs of industry, it said. Regarding the provision of modern infrastructure and logistics necessary for industrialization, the report called on governments with few resources to create "pockets of infrastructure" focused on sectoral or clustering needs of industrial expansion. It also recommended industrial parks as one approach which " provides high potential for growth and value addition as well as for solid linkage development and related spillovers among companies, suppliers and service providers." The Economic Report on Africa is a yearly flagship publication of the AU Commission and the UNECA. The Economic Report on Africa 2014 uses 11 country case studies to assess the critical ingredients for spurring Africa's industrialization and structural transformation.