by Joseph Ngwawi – SANF 16 no 26
Southern Africa is considering a series of bold measures to advance the aspirations of member states as outlined in the Industrialisation Strategy and Roadmap as the region moves to ensure that efforts to transform its economy gain traction.
SADC is developing a costed Action Plan for the Industrialisation Strategy and Roadmap 2015-2063, which was adopted in April 2015 to allow the region to harness the full potential of its vast and diverse natural resources.
The Action Plan seeks to establish a coherent and synergistic implementation scheme containing strategic options and general policies towards the progressive attainment of time-bound targets set out in the strategy and roadmap.
Senior officials from SADC member states met in Gaborone, Botswana in May to discuss the Action Plan with private sector, regional think tanks and International Cooperating Partners.
The plan will focus on the first 15 years of the strategy timeframe, and aims to create an enabling environment for sustaining industrial development as a driver of economic transformation; and establish an enduring alliance for industrialisation consisting of the public and private sectors as well as strategic partners.
The SADC Industrialisation Strategy and Roadmap was developed as an inclusive long-term modernisation and economic transformation scheme that should enable substantial and sustained economic development to raise living standards. It is anchored on three interdependent strategic pillars:
- industrialisation as champion of economic transformation;
- enhanced competitiveness; and,
- deeper regional integration.
A number of strategic interventions for each of these pillars are proposed in the Action Plan.
With regard to Industrialisation, major interventions proposed include an improved policy environment for industrial development, increased volume and efficiency of public and private sector investments in the SADC economy, creation of regional value chains and participation in related global processes, as well as increased value addition for agricultural and non-agricultural products and services.
In the area of an improved operating environment, there are plans to develop and operationalise a Protocol on Industry by 2020, which should lead to the development of industrialisation policies and strategies at national level.
Where member states already have such policies and strategies, these should be reviewed and aligned to the SADC Industrialisation Strategy and Roadmap.
Member states will be required to develop national Industrial Upgrading and Modernization Programmes (IUMPs) by 2018 and implement these by 2020.
These should be in line with the SADC IUMP, which provides the basis for a sector-specific approach to industrialisation in the region, focusing on upgrading existing manufacturing capacities, modernising productive facilities, reinforcing the institutional support infrastructure, and strengthening regional capacity for research and innovation.
There is also a target to progressively increase the share of gross domestic investment to Gross Domestic Product (GDP) to 25 percent by 2020 and to 30 percent by 2025.
To achieve these targets, there are plans to develop a SADC Investment Promotion Framework as well as a SADC Regional Action Programme on Investment to accompany it.
To encourage the creation of regional value chains and participation in global processes, the region has identified five priority areas where the value chains can be established and for which regional strategies should be developed by 2020.
These are in the areas of agro-processing, minerals beneficiation, consumer goods, capital goods, and services (See the table below on Value Chain Potential Clusters).
A detailed value chain study is proposed for specific products or services in the priority areas.
As part of the process of promoting value chain participation, there are plans to develop model legislation and regulations for intra-SADC agro-processing, minerals beneficiation and other manufacturing activities and services.
Reduction or removal of structural impediments to industrialisation is another target being pursued by SADC. In this regard, there is need to improve power generation capacity and facilitate an increase in the development and use of renewable sources of energy as well as ensure adequate water supply.
There is also need to reduce delays at ports and border posts and shorten duration of movement of goods across borders in the SADC region. This will involve harmonization of border-crossing procedures in SADC by 2020.
The Action Plan also proposes an active role for Small and Medium Enterprises (SMEs) in the SADC industrialisation agenda.
SMEs are an important variable in the SADC development agenda, representing 90 percent of all businesses and accounting for more than 50 percent of employment.
Almost all SADC member states have policies to nurture and develop SMEs while dedicating institutional capacity to champion these programmes.
An intervention being proposed is the development of a framework for establishing and supporting regional industrial clusters to promote SMEs development. Specific activities under this intervention include studies to identify the potential, type and location for regional industrial clusters involving SMEs and the development of master plans for establishing the regional clusters including technology upgrading.
Among the initiatives proposed is the concept of a “Factory SADC” under which the region will strive to achieve increased production and use of SADC raw materials for downstream processing in agro-industries and other manufacturing industries.
The thinking is that a SADC Raw Materials Initiative/Strategy should be developed and implemented by 2020 to ensure that Member States cooperate on access to raw materials and use for value addition.
Interventions under the Competitiveness pillar are aimed at strengthening of both the macroeconomic and microeconomic environments in the region.
Initiatives proposed include development of industrial investment programmes to support SMEs by 2018; training for skills, entrepreneurial and managerial development; and centres of specialization for priority sectors.
The regional Integration pillar aims to widen the economic space for development and create incentives for industry to expand, thus providing opportunities for economies of scale, clustering and economic linkages.
Specific interventions under this pillar include full implementation of the SADC Free Trade Area to cover all member states; a common external tariff by 2025; gradual phase-down and abolition of rules of origin by 2025; liberalization of exchange controls to allow free movement of capital within SADC by 2030; and ratification of the SADC Protocol on Trade in Services for implementation by 2020.
Value Chain Potential Clusters
| Value Chain | SADC Member States |
| 1. Agro-Processing Cluster | |
| Livestock – beef, dairy, poultry | Botswana, South Africa, Zambia, Zimbabwe |
| Soya | South Africa, Zimbabwe |
| Sugar | Malawi, Mozambique, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe |
| Forestry – wood products | Mozambique, South Africa, Zimbabwe |
| Fisheries | Angola, Mauritius, Mozambique, Namibia, Seychelles, South Africa |
| 2. Minerals and Beneficiation Cluster | |
| Diamonds | Botswana, Namibia, South Africa, Zimbabwe |
| Copper | DRC, Zambia |
| Platinum | South Africa, Zimbabwe |
| Iron/Steel | Mozambique, South Africa, Zimbabwe |
| Soda Ash | Botswana |
| Oil and Gas | Angola, Madagascar, Mozambique, South Africa, Tanzania |
| 3. Manufacturing of Consumer Goods Cluster | |
| Leather Goods and Footwear | Lesotho, Zambia, South Africa |
| Clothing and Textiles | Botswana, Lesotho, Madagascar, Mauritius, Namibia, South Africa, Swaziland, Zimbabwe |
| Pharmaceuticals | South Africa, Zimbabwe |
| Leather Goods | Botswana, Zambia |
| Fertilizer | Mozambique, South Africa |
| 4. Capital Goods Equipment and Machinery | |
| Automobiles | South Africa, Lesotho, Mozambique, Zimbabwe |
| Mining machinery | South Africa, Zambia |
| 5. Services Cluster | Botswana, Mauritius, Seychelles, South Africa, Tanzania, Zambia, Zimbabwe |
Source: Costed Action Plan for SADC Industrialisation Strategy and Roadmap (Compiled from National Reports)
