Africa’s share of global manufacturing falls to 1.1% – report
Africa now accounts for only 1.1% of the world’s manufacturing trade, says a new report by the United Nations Industrial Development Organization (UNIDO) and the UN Conference on Trade and Development (UNCTAD).
The share of the region in global manufacturing value added (MVA) fell from 1.2% in 2000 to 1.1% in 2008.
“Africa still accounts for a low share of global manufacturing and continues to be marginalized in global manufacturing trade…the share of the region in global MVA fell from 1.2 per cent in 2000 to 1.1 per cent in 2008,” said the report titled Economic Development in Africa (EDA) Report 2011 released on July 11, 2011.
According to the report, Africa’s share of MVA in terms of gross domestic product (GDP) fell “from 12.8 per cent in 2000 to 10.5 per cent in 2008.”
There was also a decline in the importance of manufacturing in Africa’s exports. The report notes that the share of manufactures in Africa’s total exports fell from 43% in 2000 to 39% in 2008.
In terms of manufacturing growth, 23 African countries had negative MVA per capita growth over the period 1990–2010 and five countries had an MVA per capita growth above 4 per cent.
The report indicated that Africa is losing ground in labour-intensive manufacturing…“low technology and labour-intensive manufactures play a limited role in African manufacturing,” but the continent made some progress in boosting technology-intensive manufactures which rose from 25% in 2000 to 29% in 2008.
Several factors contributed to the decline of manufacturing trade on the continent linked to weak industrial policy.
“Factors that have contributed to Africa’s weak industrial performance include domestic policy failures, lack of policy space to implement alternative development policies and structural constraints such as poor infrastructure, low human capital and the small size of domestic markets,” said the EDA.
The report says Africa cannot realistically hope to reduce widespread poverty if its governments don’t take effective measures to expand this vital economic sector.
It therefore called for a practical, well-designed approach to industrialization that is adjusted to specific country circumstances and based on extensive discussion with and feedback from businesses and entrepreneurs.
Government support to private firms is necessary to steer investment and business activities into areas of industry critical for long-term economic growth and employment generation, say the two UN agencies.
“But such support should not be open-ended…it should be terminated if improved performance – such as the production of competitive export goods – is not achieved within a specified period of time,” they said.
By Ekow Quandzie