Africa is blessed with vast resources in both human and non-human forms.
With a relative abundance of skilled and semi-skilled labour to the untold vastness in natural resources, including tropical fruit, cocoa beans, gold, iron, copper, diamonds, bauxite, uranium, silver, tropical timber, salt, cobalt and petroleum, Africa’s potentials naturally commands the envy of her global peers.
With the discovery of oil reserves, Africa’s potential wealth has skyrocketed. Still, the region has been unable to fully maximise the advantage of this newfound resource to the advancement of its economy.
Nigeria and Sudan are Africa’s leading producers of oil, while Nigeria, Libya, Algeria, Egypt and Angola jointly dominate Africa’s upstream oil production. Together, they contribute up to 85 per cent of the continent’s oil production. Other African oil producers include Gabon, the Democratic Republic of Congo (DRC), Cameroon, Tunisia, Equatorial Guinea, and the Republic of the Congo, Ivory Coast and Ghana.
On other mineral resources, Africa houses about 30 percent of global minerals while the continent’s export earnings from hydrocarbons alone sum up to 57 percent. Mineral exploration in West Africa has gained an international reputation over the years, and recent accounts document significant successes in the region’s gold discoveries.
Naturally, one would expect a highly developed Africa by the preceding account. Still, the sad reality looms as the lack of a coordinated effort to fully industrialise and develop sufficient capacity in the various economic corners of abundance prevails.
Principal elements that should support full-scale industrialisation in Africa are still lacking: targeted infrastructure, development of requisite skills and know-how, right financial policies, a buoyant and profitable public-private partnership in the agricultural and services scenes in conjunction with manufacturing, and an expanded space for digitalisation.
The African Continental Free Trade Area (AfCFTA) agreement occasioned a bold opportunity for African economies to support economic transformation through industrialisation, especially regarding trade linkages across the continent. If this occurred, manufacturing capacity would have been triggered, and growth driven by intra-regional trade would have been achieved.
While there may be a visible ambition for Africa to fully industrialise, polemics surrounding the continent’s manufacturing capacity to create jobs, earn export revenue and attract sustained prosperity prevails, especially in the face of a large-scale manufacturing absence. Hence, to re-open the window of opportunity offered by industrialisation, African authorities must wake up to the responsibility before them by promoting policies that will re-awaken the cause of full-scale manufacturing and resource utilisation.
Import substitution strategies that do not mask healthy trade flows should be instituted in African countries with vast resources with nearness to production plants and a ready market. Finished goods export, competitively produced, can be sent beyond borders to earn foreign exchange revenue and help stabilise current account imbalances.
Effective finance resource mobilisation is a fundamental way out of the current industrialisation lag that the continent faces. Innovative thinking in how finance and sovereign spending is leveraged and utilised is also highly required if effective coordination and institutional arrangements between public and private interests must yield desired results. Development plans in the likes of Rwanda’s National Five Year Development Plan 2016.17-2020/21 (FDYP II) should be made top governmental priorities. Sufficient funding, clarity on funding sources, and re-financing programmes must also follow devised development plans accordingly.
Policies that redistribute jobs across sectors towards driving manufacturing output should also be prioritised. With a higher per capita marginal productivity promise, the manufacturing industry has the capacity to enlist workers who desire a better life quality than they enjoyed in their former engagements. With greater returns to labour per time consumed in production, individuals employed in manufacturing stand to raise their living standards.
Kenya’s Supporting Economic Transformation (SET) programme and the Kenya Association of Manufacturer’s initiatives in the post-2017 elections helped boost labour supply absorption into the manufacturing sector. Job creation and industrialisation in Kenya increased accordingly as a result of the proper implementation of the initiatives. Also, growth in Kenya’s local manufacturing is pleasing as large firms are continually building links with smaller firms that make up the local economy.
At present, Nigeria’s industrial landscape still begs for more attention from the government and other private investors. There is excess capacity to be utilised and untold volumes of potential gains to be made if the suitable investments are birthed.
Luck seems to have smiled on the nation’s gold mining industry as it is positioned to receive a boost from funding opportunities made available by a UK mining firm, Aurelia Mining Limited. With an initial investment of $10 million going into preliminary unearthing of gold deposits in the country, the mining firm hopes to throw in up to $100 million if large quantities of the hard-sought mineral are found. With this concentration of investment funding, it is hoped that other sub-sectors within the industry’s ecosystem will catch a contagion.
Historical facts reveal that developed countries of the world broke the vicious cycle of poverty through industrialisation. In the same way, African countries may tow the same route if they can fully engraft viable industrialisation policies into their baseline economic structure and channel relevant resources into competitive, productive uses.