SADC Extraordinary Summit to cost industrialization programme

by Kizito Sikuka – SANF 17 no 6, March 2017
Southern African leaders are expected to make a bold statement on taking forward the regional integration agenda when they meet in Swaziland to approve a costed action plan for the industrialisation strategy adopted in 2015.

The costed action plan for the Industrialization Strategy and Roadmap is expected to be presented to an Extra Ordinary Summit of the Southern African Development Community (SADC) in Ezulwini, Kingdom of Swaziland on 18 March.

The action plan seeks to establish a coherent and synergistic implementation scheme containing strategic options and general policies towards the progressive attainment of time-bound targets set out in the strategy and roadmap.

The action plan focuses on the first 15 years of the strategy timeframe, and aims to create an enabling environment for sustaining industrial development as a driver of economic transformation; and establish an enduring alliance for industrialisation consisting of the public and private sectors as well as strategic partners.

It was developed as an inclusive long-term plan for modernisation and economic transformation that should enable substantial and sustained economic development to raise living standards. The strategy and roadmap is anchored on three interdependent strategic pillars:

  • industrialisation, as a champion of economic transformation;
  • enhanced competitiveness; and,
  • deeper regional integration.

Strategic interventions for each of these pillars are proposed in the action plan. These include an improved policy environment for industrial development, increased volume and efficiency of public and private sector investments in the SADC economy, creation of regional value chains and participation in related global processes, as well as increased value addition for agricultural and non-agricultural products and services.

In order to improve the operating environment, there are plans to develop and operationalise a Protocol on Industry by 2020, which should lead to the development of industrialisation policies and strategies at national level.

Where Member States already have such policies and strategies, these should be reviewed and aligned to the SADC Industrialisation Strategy and Roadmap.

Member States will be required to develop national Industrial Upgrading and Modernization (IUM) Programmes by 2018 and implement these by 2020.

These should be in line with the SADC IUM Programme, which provides the basis for a sector-specific approach to industrialisation in the region, focusing on upgrading existing manufacturing capacities, modernising productive facilities, reinforcing the institutional support infrastructure, and strengthening regional capacity for research and innovation.

There is also a target to progressively increase the share of gross domestic investment to gross domestic product to 25 percent by 2020 and to 30 percent by 2025.

To achieve these targets, there are plans to develop a SADC Investment Promotion Framework as well as a SADC Regional Action Programme on Investment to accompany it.

To encourage the creation of regional value chains and participation in global processes, the region has identified five priority areas in which the value chains can be established and for which regional strategies should be developed by 2020.

These are in the areas of agro-processing, minerals beneficiation, consumer goods, capital goods, and services.

A detailed value chain study is proposed for specific products or services in the priority areas.

As part of the process of promoting value-chain participation, there are plans to develop model legislation and regulations for intra-SADC agro-processing, minerals beneficiation and other manufacturing activities and services.

Reduction or removal of structural impediments to industrialisation is another target being pursued by SADC. In this regard, there is need to improve power generation capacity and facilitate an increase in the development and use of renewable sources of energy as well as ensure adequate water supply.

There is also need to reduce delays at ports and border posts and shorten the duration of movement of goods across borders in the SADC region. This will involve harmonization of border-crossing procedures in SADC by 2020.

The action plan also proposes an active role for Small and Medium Enterprises (SMEs) in the SADC industrialisation agenda. SMEs are an important variable in SADC development plans, representing 90 percent of all businesses and accounting for more than 50 percent of employment.

Interventions under the Competitiveness pillar are aimed at strengthening of both the macroeconomic and microeconomic environments in the region.

Initiatives proposed include the development of industrial investment programmes to support SMEs by 2018; training for skills, entrepreneurial and managerial development; and centres of specialization for priority sectors.

The regional Integration pillar aims to widen the economic space for development and create incentives for industry to expand, thus providing opportunities for economies of scale, clustering and economic linkages.

Specific interventions under this pillar include full implementation of the SADC Free Trade Area to cover all Member States; a common external tariff by 2025; gradual phase-down and abolition of rules of origin by 2025; liberalization of exchange controls to allow free movement of capital within SADC by 2030; and ratification of the SADC Protocol on Trade in Services for implementation by 2020.

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