A Road Map for scaling up Africa’s economic transformation
29 July 2016, Sweetcrude, Lagos — Africa’s industrialization agenda, one of the Bank Group’s top priorities for the continent’s economic transformation, received a boost this week with the approval of the Bank Group’s Industrialisation Strategy for Africa 2016-2025.
The Strategy, approved by the AfDB’s Board on Thursday, 14 July 2016, represents a roadmap for implementing priority programs to scale–up the industrial transformation of Africa. It addresses key issues such as: (i) Why we need to industrialize Africa; (ii) What it will take to industrialize Africa; and (iii) How AfDB will help to industrialize Africa.
In designing the strategy, the Bank underscored the vital roles that industrialization plays in development as it leverages all the value chains of economic activity ranging from raw materials to finished products. It catalyzes productivity by introducing new equipment and new techniques, increases the capabilities of the workforce, and diffuses these improvements into the wider economy. It generates formal employment, which in turn creates social stability. It improves the balance of trade by creating goods for export and replacing imports.
The strategy aims to (i) Develop industrial sector and policy framework, (ii) Enhance trade and integrate Africa into the regional and international value chains and (iii) Boost competitiveness and value creation by expanding supply of business services to maximize impact on the performance of industries and vice-versa.
To achieve these goals, the strategy would rely on five enablers which the Bank will mainstream into flagship programs. These are: (i) Supportive policy, legislation and institutions; (ii) Conducive economic environment and infrastructure; (iii) Access to capital; (iv) Access to markets; and (v) Competitive talents, capabilities, and entrepreneurship.
“In successful industrializing countries, these enablers have typically been integrated into a comprehensive industrial policy that has enabled businesses, both large and small, to develop along the value chains of selected, high-potential industrial sectors,” according to strategy document.
The Bank will support countries by championing six flagship programs: (i) Foster successful industrial policies; (ii) Catalyze funding in infrastructure and industry projects; (iii) Grow liquid and effective capital markets; (iv) Promote and drive enterprise development; (v) Promote strategic partnerships; and (vi) Develop efficient industry clusters.
It would also increase its level of funding and crowding-in third party resources to the tune of USD 35 to 56 billion over the next decade. The Bank will also leverage additional resources through partnership with other DFIs, relevant UN agencies, AUC, RECs, and special purpose vehicles providing seed funds. In addition, substantial amounts will be mobilized through syndication and co-financing in support of phased programs that would be specific to local contexts and in line with the countries’ development goals.
“Industrialize Africa” will build on synergies across the other H5’s – Light up and power Africa, Feed Africa, Integrate Africa, and Improve the quality of life for the people of Africa – by virtue of its cross-cutting agenda.
Prepared in consultation with the relevant UN organisations such as UNIDO, UNECA as well as internal multi-sectoral and external consultations, the African Industrialization Agenda is grounded on (i) the SDGs which recognize that industrialization is the right path to accelerate growth (ii) the Action Plan for Accelerated Industrial Development of Africa (AIDA (iii) Regional Economic Communities (RECs) industrial policies.