AFRICAN UNION UNION AFRICAINE UNIÃO AFRICANA Statement by Ambassador Albert M.Muchanga on the Need for Industrialization and Market Integration in Africa Delivered on 22nd November, 2017 at the European Parliament Africa Week High Level Event 1 I thank His Excellency Antonio Tajani for inviting me to this High Level Event. The idea of having an Africa Week is most welcome. It is a contribution to consolidating the partnership not just between the African Union and the European Union but also among the people of the two regions. 2 The need for industrialization and market integration in Africa is well articulated by both the African Union and the United Nations Economic Commission for Africa. In 2008, the African Union Ministers of Industry stated that: ‘No country or region in the world has achieved prosperity and a decent socio-industrial life for its citizens without the development of a robust industrial sector’. 3 In the same spirit, the United Nations Economic Commission for Africa stated in 2016 in its report entitled: Transformative Industrial Policy for Africa: ‘no country, except a few states exceptionally rich in oil (e.g., Qatar, Kuwait, Brunei) or very small financial havens (e.g., Monaco, Liechtenstein), has achieved high and sustainable standards of living without developing a significant manufacturing sector’. 4 From these two quotations, it is clear that Africa has to industrialize for her to move up the ladder of sustainable development. Your Excellences: Efforts to industrialize started a long time ago. African countries have since independence embarked on industrialization programmes but with limited success. As a result of the limited success, their sustainable development challenges have not been met. 5 For example; the productivity levels in Africa are still very low and African economies still largely depend on commodity production and export. These challenges translate into structural weaknesses of the African economies, their marginal role in the global economy and their failure to create opportunities for decent employment as well as decent living standards for the African people. With this situation also comes economic vulnerability, low income and low 6 human development levels among our people across the continent. As a result, Africa has the highest number of least developed countries. Furthermore, a majority of them seem to be experiencing low income and middle income traps. Industrialization will be one of they key levers to bring our countries out of their development traps. Your Excellences: 7 Before I dwell on what it would take to put Africa on the path of sustainable industrialization, I would like to briefly touch on the historical patterns of our industrialization efforts. Africa has historically experienced rapid economic growth during periods of commodity booms. It is in this connection that Africa’s value added in her Gross Domestic Product is largely dominated by oil and mineral exporting countries. This has made Africa’s 8 industrialization base weak. Indeed, import substitution industrialization could not be sustained in the face of foreign exchange shortages arising from low commodity prices and heavy external debt servicing obligations. It is against this background that the share of African manufacturing to Gross Domestic Product fell from 19% in 1975 to around 11% in 2006 and has stagnated around 10% since 2008 (according to publications by the World 9 Bank. It is in the same vein that the contribution of African manufacturing to Gross Domestic Product has been relatively small, compared to other regions of the world. Consequently, Africa’s weak industrialization base has failed to generate high productivity, decent jobs and structural transformation. The two quotations cited above indicate that Africa has to meet the industrialization challenge. The only 10