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On economic integration and Africa's industrialisation

by Ngoni Bopoto
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The East African Community (EAC) announced it will soon launch a uniform industrialisation plan that will see the members harmonise efforts in the field of Industrial and SME development.
EAC Industrialisation Policy and Strategy experts met in Uganda last week to finalise on the policy document.
The key issue is how to address the imbalances in industrial development levels of the various member states. The idea is that a synchronised regional industrialisation plan would enable the member states to move from agriculture based economies and increase economic growth in the region from the current 5% average to 12% within the next five years.
However, despite the logical nature of the argument one cannot help but be cautiously optimistic given the track record of economic integration in Africa which dates back to the OAU in 1963.
In my opinion, the main problem is that regionalism and therefore economic integration in Africa has always had a strong political motive.
In spite of the extraordinary quantities of strategic mineral resources and abundant agricultural commodities that Africa is endowed with, most of the countries on the continent are geographically small and economically weak.
Taking this into considering and the relative economic strength of our major trading partners, the case for regional economic integration is compelling. The complex part appears to be coming up with a structure that is equitable in terms of benefits accruing where they are due and being development oriented. Furthermore, implementation is hampered by overlapping membership, policy harmonisation, lack of diversification and poor private sector participation.
In order to address the development goals such as poverty reduction, education and food security, Africa needs to raise its level of industrialisation.
The manufacturing sector in Africa for instance, is still very modest compared to other developing regions. Manufacturing does not represent a large share in the GDP of the continent, but it has a considerable capacity for growth. Constraints such as the size of markets and economies can be overcome through well structured intergrated trade and industrial blocs.
One of the main reasons why the industrialisation of Africa has failed to take off is because the strategies of donor agencies and the African power elites have always been more interested in setting up capital-intensive large concerns rather than promoting the growth of existing small-scale enterprises.
What has become clear is that modern big businesses fail to find the environment they need for their operations and at times are not capable of surviving. Furthermore, they contribute very little to the development of the African economy and society.
This strategy has been meant to serve as a "catch up" type of development post colonialism. What we have not considered however is that development is a phased process and each stage is often a pre-requisite in order for the next phase to be successful.
Harmonisation of regional industrial policies therefore appears to be a key building bloc of not only the regional economic integration agenda, but more importantly of the next great industrialisation.