Africa Industrialization Day, which falls on Friday, mobilizes the international community’s commitment to the industrialization of the continent and gives us the opportunity to reflect on the impact of the Bank in this sector, one of its High 5 priorities.
From oil to cocoa, cotton to vanilla, Africa is rich in natural resources, but its great dependence on commodity exports means it still has to utilize the full value of raw material processing and manufacturing.
The African Development Bank is changing this by promoting successful industrial policies, attracting infrastructure and industrial funding and supporting the growth of capital markets to create jobs that facilitate quality.
Progress has been made over the past decade, with production growth in Africa surpassing the global growth rate. In 2019, industrial GDP in Africa expanded by 17% to $ 731 billion (in 2010 dollars), with the value added of manufacturing rising by 39%, according to the Bank’s 2020 Annual Review of the Effectiveness of Development (ADER).
But the industrialization of Africa is geographically limited, and about two-thirds of value-added manufacturing takes place in just five countries: Algeria, Egypt, Morocco, Nigeria and South Africa.
This year, progress was reversed by the COVID-19 pandemic, which increased economic growth, disrupted trade and financial flows, and caused millions of job losses.
The economic and social impact of the pandemic has industrialized more urgency in the pursuit of Africa, just as the African continental free trade area wants to reform the continent into a single market of 2.5 billion people by 2050.
As the African Development Bank joins the international community to celebrate Industrialization Day, we deserve all the stories of women and men turning the tables on Africa’s industrialization front.
PROCESSING, MANUFACTURING AND TECHNOLOGY
Just outside Cairo, the Egyptian Refining Company (ERC), a greenfield petroleum refinery, is one of the largest industrial units of its kind in Africa.
With nearly $ 222 million in bank financing, the refinery is converting the lowest value fuel into 4.7 million tons of high-quality refined and oil-derived products per year, which meet local consumption needs, emitting reduce dirty fuel and reduce Egypt’s balance of payments. deficit.
The giant project created more than 15,000 jobs during peak construction and 1,000 permanent local jobs.
“From day one, they could see that this project, which has been in development for 12 years, is going to have a transformative effect on Egypt’s economy,” said Ahmed Heikal, chairman and founder of ERC’s parent company, Qalaa Holdings.
In 2019, 1 million people across Africa benefited from the Bank’s industrial investment projects. Turnover from bank investments in micro, small and medium-sized enterprises (MSMEs) has almost tripled to $ 1 billion, far exceeding the targets.
Some of the best opportunities for the industrialization of Africa lie in agriculture. Important for this sector is the Bank’s support for Special Agro-Industrial Processing Zones (SAPZs), which strengthen the capacity of African countries to attract investment in the private sector by combining policies, investment and infrastructure, usually in a rural area with high agricultural production.
Take South Africa, where the Bank supports the development of 22 SAPZs. One of them, Bokomoso Ba Rona SAPZ, aims to rehabilitate an area and develop an economy after mining on a 30,000 hectare site owned by the mining company Sibanye-Stillwater.
“We strive to attract investment in the private sector, which will drive agricultural processing and build a strong value chain,” said Noxolo Mtembu, project manager at the Gauteng Infrastructure Financing Agency, responsible for the development of the SAPZ.
Africa’s emerging connectivity and a workforce increasingly familiar with the digital world and new technologies will enable the continent to make use of the fourth industrial revolution to improve productivity, create jobs and expand social well-being. .
New industries have transformed the structure of local economies, for example in Nabeul, in north-eastern Tunisia, which was once best known as a craft and tourism center.
Now Nabeul is becoming widely known for its high-tech industries. With funding from the Bank, the MEDIS Pharmaceutical Laboratory has been established to manufacture generic medicines, creating thousands of skilled jobs and becoming one of the largest employers in the region.
The lab provided formal, secure jobs for many people who would otherwise be confined to informal work or unemployment.
“My job at MEDIS has given me freedom and dignity. I do not ask for a handout and I do not ask for anything from anyone,” Sabra Gmati said.
“If MEDIS or a business like this were not in Nabeul, I would be unemployed and I would stay at home.”