Helen Clark: Speech at the UN GA Side Event, “Towards TICAD VI: Africa’s Transformation through Industrial Development and Agenda 2063”Sep 28, 2015
I am pleased to join you for this High Level Event to kick-start substantive discussions on TICAD VI. UNDP is proud to be a founding partner of the TICAD process.
Since its inception in 1993, guided by the dual principles of African “ownership” and “international partnership”, TICAD has been a driver of sustainable and people-centered development in Africa. It has consistently aimed at generating inclusive economic growth, which is backed by good governance which is important for creating the enabling environment for growth, and is made sustainable through investments in the productive capacities, health, and education of the people of Africa – the true wealth of the continent.
Now, as TICAD VI is being planned, I have no doubt that the new publication by Akbar Norman and Joseph Stiglitz of Columbia University, “Industrial Policy and Economic Transformation in Africa”, will make an important contribution to the agenda for TICAD VI.
Africa’s emerging opportunities and constraints for economic transformation
Africa’s quest for economic transformation is well reflected in Agenda 2063 adopted by the African Union – and it’s important that our work as development partners is aligned with that. Agenda 2063 aims to translate Africa’s robust growth into economic and social transformation. That growth has averaged over five per cent for the last ten years. Africa’s GDP growth rate is expected to be 4.5 per cent this year, and five per cent in 2016 .
The history of human development tells us, however, that it is the quality of economic growth which matters – and not just its speed. For maximum human development benefits, growth needs to be inclusive, sustainable, and job-rich. The manner of industrialization can support that.
TICAD V was supportive of:
• boosting economic growth;
• accelerating infrastructure and capacity development;
• empowering farmers as mainstream economic actors; and
• promoting inclusive, sustainable, and resilient growth.
TICAD V also aimed to reverse the declining share of added value manufacturing in Africa’s Gross Domestic Product (GDP) and in the share of manufacturing in its exports.
Already the Yokohama Plan of Action under TICAD V is helping to address infrastructure challenges, including transportation corridor development, urban transportation, provision of low-carbon energy and optimization of energy use, and ICT infrastructure.
The African Business Education (ABE) initiative is helping to strengthen the industrial skills base and technological capabilities on the continent, including by offering young people training opportunities.
Africa’s own African Productive Capacity Initiative and the Action Plan for Accelerated Industrial Development for Africa are promoting industrialisation and economic diversification.
Africa’s path to transformation will benefit from:
(1) Diversifying economies. Industrialization itself enables the rapid acquisition of new skills and technological capabilities. Japan and the TICAD process are relevant here; for example, the vocational and technical training center in Senegal, supported by JICA, has contributed to skills acquisition. As of 2013, it had around 2,300 alumni with a post-training employment rate exceeding eighty per cent.
Industrialization can support inclusive growth across the local economy. For example, adding value to the primary production of extractives and agriculture creates jobs and lifts national income.
(2) Mitigating the impact of external economic shocks. Economic diversification, including by adding value to primary commodities through industrialisation, also helps protect countries from external economic shocks, including the terms of trade shocks which are often associated with commodity trade.
UNDP’s Regional Bureau for Africa is currently finalizing a study on the booms and bursts of primary commodity prices in Africa. It is documenting African experiences with a view to sharing and advocating good practices in mitigating external shocks associated with the fall in primary commodity prices.
(3) Addressing inequalities. We see successes on the continent in this area; for example, Ethiopia succeeded in reducing income inequality by fifteen per cent between 1995 and 2010; and in a period of seven years (2006 and 2012), Rwanda reduced income inequality by 4.2 per cent. By actively targeting the reduction of inequalities, African countries will harness the full potential of women and marginalized groups. The agricultural sector in particular would be greatly boosted by gender equality measures which give women equal access to productive assets, inputs, and finance.
(4) Harnessing the potential of youth. Youth will energise Africa’s transformation – if countries invest in and create opportunities for them. Lifting education and skills levels and enabling youth entrepreneurship will reap big rewards.
(5) Improving jobs and livelihoods. Eighty per cent of Africa’s workers remain in low productivity jobs in agriculture, or in low-value service sector livelihoods with little or no income. This can change with industrialisation and smart strategies which upskill the workforce.
The alignment between TICAD V and Agenda 2063 on using industrialization as a strategy for economic transformation provides some insights into what could be the areas of focus for the next TICAD.
TICAD VI, the first TICAD summit to be held in Africa, can draw on experiences from Africa’s industrialization to date. Industrial policy needs to encompass development of the capabilities of people. Addressing infrastructure deficits and financing gaps is very important.
Against the backdrop of strong strategic collaboration with Japan, and with the African Union and other co-organizers of TICAD, UNDP looks forward to working closely with all stakeholders to advance substantive discussions on African development and a successful TICAD VI.