A Sting Exclusive: “Seize the opportunity offered by Africa’s continental free trade area”, written by the Director General of UNIDO

Li Yong UNIDO 2018.jpg

Mr. Li Yong, Director General of the United Nations Industrial Development Organization                  (UNIDO, 2018)

This article was exclusively written for The European Sting by Mr. Li Yong, Director General, United Nations Industrial Development Organization (UNIDO), the specialized agency of the United Nations that promotes industrial development for poverty reduction, inclusive globalization and environmental sustainability. The opinions expressed in this article belong to the distinguished writer.

Since the turn of the millennium, Africa has experienced a steady and unprecedented economic growth.

However, poverty continues for people across the continent, especially in the sub-Saharan region. Unemployment and inequality have remained high. The rural population and the urban poor, women and youth, have not benefited from economic growth.

African policymakers realize that, for the benefits of growth to be shared by all, there needs to be a structural transformation of the economy. Specifically, there is an acknowledgement that its composition should change, with increased shares of manufacturing and agro-related industry in national investment, output, and trade.

Manufacturing, thanks to its multiplier effect on other sectors of the economy, has always been one of the most important drivers of economic development and structural change, especially in developing countries. Manufacturing is an “engine of growth” that enhances higher levels of productivity and greater technical change, thus creating more jobs with higher wages for both women and men.

Recognizing this, the United Nations has proclaimed the period 2016-2025 as the Third Industrial Development Decade for Africa (IDDA III) in order to increase global awareness and encourage partnerships to achieve inclusive and sustainable industrialization.

Today, Africa has exceptional opportunities for industrialization.

In the next few decades, Africa will become the youngest and most populous continent in the world with a working age population expected to grow by 450 million people. or close to 70 per cent of the total, by 2035.

With a rapidly growing population, and one of the world’s highest rates of urbanization, the middle class is on the rise too. This will drive consumption of consumer goods, creating a market worth USD 250 billion, set to grow at an annual rate of 5 per cent over the next eight years.

Industrialization, diversification and job creation in Africa, however, cannot happen without continental economic integration. The recent signing of the historic agreement for an African Continental Free Trade Area (AfCFTA) by 49 out of 55 countries creates an opportunity for inclusive and sustainable economic development, moving away from structural stagnation and commodity-based economics. The AfCFTA agreement will create the world’s largest single, integrated market for goods and services, and a customs union that will enable free movement of capital and business travelers in Africa.

This will provide great business opportunities for trading enterprises, businesses and consumers, unlocking trade and manufacturing potential and further enhancing industrialization in Africa. With the AfCFTA agreement, exports of processed or intermediate goods will increase rapidly, further opening the way to Africa’s economic transformation to dynamically-diversified economies and globally competitive industrial production locations.

Higher trade among African countries will also strengthen African regional value chains, making it easier for local small and medium-sized enterprises, which account for around 80 per cent of Africa’s businesses, to build competitiveness, supply inputs to larger regional companies, and participate in and upgrade to global value chains.

This will give unprecedented opportunities to exploit the full agri-business potential of the continent. Strengthening the continent’s agro-industries can generate high social and economic returns, create jobs in rural areas and for young women and men, as well as responding to the urgent need to ensure food security and poverty reduction.

By taking bold actions in advancing the agenda of the AfCFTA, using it as one of the best means of promoting industrialization, African countries are well-positioned to build an Africa that can become a strong link in today’s interdependent global economy.

Structural transformation, however, is never automatic. Political goodwill and commitments are a first important step; but a multi-pronged, action-based approach with partnerships at the heart, along with concrete industrial policies, is needed for this to become a reality.

That is why UNIDO has developed an innovative country-owned, multi-stakeholder partnership model to provide governments with a platform to bring together various stakeholders, including development finance institutions and the private sector, to mobilize large-scale resources, accelerate industrialization and achieve a greater development impact.

Using this Programme for Country Partnership (PCP) approach, and helping governments to identify priority sectors based on prospects for job creation, strong links to the agricultural sector, high export potential and capacity to attract investment, UNIDO has already started assisting Ethiopia, Senegal, Morocco and other countries in Asia and Latin America in achieving their export goals and enabling the manufacturing sector to compete on the increasingly globalized market.

Now more than ever, such innovative schemes and mechanisms for enabling partnership building and resource mobilization for sustainable industrial development are needed to address the urgent need for structural transformation in Africa and seize the opportunities offered by the AfCFTA.

About the author

LI Yong, Director General of the United Nations Industrial Development Organization (UNIDO), has had an extensive career as a senior economic and financial policy-maker. As Vice-Minister of Finance of the People’s Republic of China and member of the Monetary Policy Committee of the Central Bank for a decade, Mr. Li was involved in setting and harmonizing fiscal, monetary and industrial policies, and in supporting sound economic growth in China. He pushed forward financial sector reform, and prompted major financial institutions to establish corporate governance, deal with toxic assets and strengthen risk management. Mr. Li gave great importance to fiscal and financial measures in favor of agricultural development and SMEs, the cornerstones for creating economic opportunities, reducing poverty and promoting gender equality. He played a key role in China’s cooperation with multilateral development organizations, such as the World Bank Group and the Asian Development Bank.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

COVID-19 pandemic: The war inside our heads

Asking for more restriction on intra EU immigration: Unproductive and politically dangerous

Coronavirus: a Disease that spreads as fastly as its fake news

Can the Tokyo Olympics help bring the world together?

European research priorities for 2021-2027 agreed with member states

The Eurogroup protects Germany and blames others

Myanmar military target civilians in deadly helicopter attack, UN rights office issues war crimes warning

The price of centralization of human resources for health

Children of ISIL terrorists likely held in ‘secret detention facilities’, UN human rights office warns

EU: Divided they stand on immigration and Trump hurricanes

COVID-19 and the pursuit of financial inclusion in Pakistan

Coronavirus: Commission launches data sharing platform for researchers

Infringement – Commission takes Italy to Court for its incomplete regime of access to genetic resources

Human rights champions from across the world receive top UN prize

Germany may have a stable and more cooperative government

How income-sharing agreements can improve access to education

Lagarde discusses the European Central Bank’s policy revamp with MEPs

Macro-Financial Assistance: Europe’s way to control Ukraine?

ECB asks for more subsidies to banks

COVID – ACT III, When do I get off the stage?

SRHR and Ending HIV : Can one be achieved without the other ?

Sign language protects ‘linguistic identity and cultural diversity’ of all users, says UN chief

Who really cares about the 26.2 million of EU jobless?

19th EU-China Summit: A historical advance in the Chino-European rapprochement

‘Foreign children’ in overwhelmed Syrian camp need urgent international help, says top UN official

EP survey: EU recovery funds should only go to countries respecting Rule of Law

FROM THE FIELD: West Africa’s wishful gold diggers

Moving from commitment to action on LGBTI equality

Tokyo 2020 Olympics: from cardboard beds to recycled medals, how the Games are going green

Commission’s action plan: financial world mandatory links to environmental targets

Fostering intergenerational solidarity and cooperation through age-friendly environments: the right answer to Europe’s demographic challenge

The Eurogroup+ is born to govern the EU Banking Union

European Youth Forum demands immediate action & binding agreement on climate change

How to create a transparent digital economy and rebuild consumer trust

Coronavirus reinforces the importance of empathy

To all far-right partisans who exploit Charlie Hebdo atrocity: a peaceful reply given by a peaceful student

For how long and at what cost can the ECB continue printing trillions to keep euro area going?

What is the European Super League and how would it work?

State aid: Commission approves German scheme for very high capacity broadband networks in Bavaria

To feed 10 billion people, we must preserve biodiversity. Here’s how

Ramped-up emergency preparedness, part of ‘changing the DNA’ of the UN’s health agency

New Report Offers Global Outlook on Efforts to Beat Plastic Pollution

How African countries can benefit from plan to reform global tax

Destabilizing Lebanon after burning Syria; plotting putsch at home: King and Crown Prince of Saudi Arabia

COVID-19 is an unmissable chance to put people and the planet first

Take care of your borders and then expand them

The Juncker Plan at work: bringing investment back on track in Europe

Africa-Europe Alliance: European Commission committed to a sustainable African agri-food sector

Mindfulness: a freedom we can still have in the pandemic

If you live in a big city you already smoke every day

Employment and Social Developments in Europe: 2018 review confirms positive trends but highlights challenges, in particular linked to automation and digitalisation

Safer products: EP and Council close deal to beef up checks and inspections

Coronavirus global response: EU Humanitarian Air Bridge to Iraq and new funding

Top UN Syria envoy hails ‘impressive’ start to historic talks in Geneva

UN rights chief slams ‘unconscionable’ US border policy of separating migrant children from parents

EU-US resume trade negotiations under the spell of NSA surveillance

The world’s economy is only 9% circular. We must be bolder about saving resources

How many websites are there?

State aid: Commission approves €650 million Polish support to LOT in context of coronavirus outbreak

Nepal faces a crisis as COVID-19 stems the flow of remittances

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s