Dr Alfred Bewindin SAWADOGO: « Governance for Industrialisation: A key for Africa! »

By Dr. Alfred Bewindin SAWADOGO*

The need for industrialization is not a new idea. As early as 1960, for example, Prof. Cheikh Anta Diop published in « Cultural and Economic Foundations of a Federal State of Black Africa » a plan for the industrialization of Africa. Up to the present day, international development agencies, researchers, and African intellectuals regularly emphasize the urgent need for structural transformation of African economies through industrial development.

Africa has experienced late industrialization compared to Europe, North America, which industrialized in the 19th century, and Asia, which industrialized in the 20th century. Its industrial base is still weak, as evidenced by Africa’s low share in global industry, which is generally less than 3%. To characterize the evolution of industrialization in Africa, Mezouaghi and Karim El Aynaoui highlight that the continent experienced late industrialization and early deindustrialization. They state: « Africa’s industrialization began in the 1960s, driven by ambitious import substitution policies, largely relying on the commercial protection of public enterprises in monopoly positions. Historically late, industrialization would decline from the 1980s in a context of economic deregulation (public debt crisis, widening external deficits, rising unemployment) » (Source: Mihoub Mezouaghi, Karim El Aynaoui, « Is Africa on the Path to Industrialization? », Africa Contemporaine, 2018/2). The value added of Africa’s manufacturing sector currently stagnates around 10% of Gross Domestic Product (GDP).

“While countries like Morocco and Ethiopia are often cited for their remarkable progress in industrialization, it must be acknowledged that most African countries are making slow progress”

Africa’s low industrialization is reflected in exports mainly focused on fuel, agricultural, and mineral products, and imports mainly centered around manufactured goods. Unfortunately, this configuration is far from optimal.

Firstly, it contributes to poverty in Africa by hindering the continent’s economic development. It is no coincidence that Africa’s GDP, around 2.994 trillion US dollars, is lower than that of a country like the United Kingdom, which stands at around 3.159 trillion US dollars, according to the 2023 Ibrahim Foundation report. Behind these numbers, one must see the low per capita income in Africa with all the consequences it entails: difficulties in accessing education, healthcare, hunger, and malnutrition, etc. The World Bank’s 2022 report on poverty and shared prosperity states that « Sub-Saharan Africa is home to 60% of the world’s extremely poor people, or 389 million individuals. »

Secondly, low industrialization fuels the employment deficit in Africa. According to data from the African Development Bank, 10 to 12 million young Africans enter the job market each year while only 3 million formal jobs are created. Moreover, the manufacturing sector in Africa accounts for only 6% of total employment. The consequences of the employment deficit are dramatic, ranging from enrollment in extremist groups to illegal immigration.

Thirdly, Africa is dependent on industrialized countries, even in vital areas such as agri-food. For example, the continent imports around 83% of the processed food it consumes. In case of supply disruptions due to pandemics like COVID-19 or conflicts such as the Russo-Ukrainian war, several sectors and activities in Africa are at significant risk.

Aware that industrialization is essential, African decision-makers and their partners have developed numerous initiatives at national, regional, and continental levels. Continental initiatives include i) the Accelerated Industrial Development of Africa (AIDA), ii) the Programme for Infrastructure Development in Africa (PIDA), iii) the Strategy for Science, Technology, and Innovation for Africa (STISA), iv) the African Continental Free Trade Area (AfCFTA), etc. Regional initiatives include i) the Southern African Development Community Industrialization Strategy and Roadmap 2015-2063, ii) the East African Community Industrialization Strategy 2012-2032, iii) the West African Common Industrial Policy (PICAO), etc.

4 key drivers of industrial growth: road, energy, and digital infrastructure

All these initiatives aim to influence the four main drivers of industrial growth: road, energy, and digital infrastructure, education in general or scientific education in particular, the protection of young industries, and the financing of industrial enterprises.

The financing deficit is often pointed out as the major obstacle to the continent’s industrial growth. But one question haunts my mind: how can a continent seeking to finance its industrialization not take more seriously the fight against illicit financial flows, which, it should be remembered, cost it more than 50 billion US dollars a year? A United Nations report states: « Over the past 50 years, Africa is estimated to have lost more than 1 trillion US dollars due to illicit financial flows. This figure is roughly equivalent to the total amount of official development assistance Africa has received during the same period » (Source: United Nations, Economic Commission for Africa 2015, Illicit Financial Flows: Report of the High-Level Panel on Illicit Financial Flows from Africa, Addis Ababa).

While countries like Morocco and Ethiopia are often cited for their remarkable industrialization progress, it must be acknowledged that most African countries are moving slowly.

In my opinion, what African countries lacked from the outset was making industrialization a priority. The evidence that industrialization does not seem to be a priority is that this subject is rarely discussed in public debates. How many TV shows, radio programs, or press articles seriously address the issue?

“Making industrial development a priority must be concretely translated into ambitious and coherent national industrial policies and strategies”

Making industrial development a priority must be concretely translated into ambitious and coherent national industrial policies and strategies. Once decisions are made, the state apparatus must have an optimal organization that allows it to translate industrialization objectives and plans into tangible results. While it is true that the private sector will play the primary role in the industrialization process, it remains the responsibility of the public authorities to create the favorable conditions without which industrialists cannot do anything.

But all of this presupposes first and foremost the strengthening of good governance in African countries. I call good governance, governance centered not on the interests of leaders but on the concerns of the people; governance that respects the regulations (chief among them being the Constitution) that each country has set for itself. When one cares about the people’s welfare, one finds the means to improve their material conditions. And industrialization holds a key place in these means!

*Doctor in Telecommunications, writer, and leader of the MROD/BF think tank.