Addis-Ababa (Ethiopia), Nov. 19, 2023: Some experts on Saturday said African nations should collaborate to advance industrialisation by increasing intra-regional trade.
The experts spoke during presentation of study papers that analysed the critical role innovation, technology and industrialisation play in Africa.
The presentation was part of the ongoing African Economic Conference (AEC) holding in Addis-Ababa, Ethiopia.
One of the experts, Mr Gideon Ndubuisi, who conducted a research on Technological Capability and Industrialisation in Africa, said the study x-rayed the pattern of industrialisation in the continent.
“Our results show strong evidence of technological and industrial development interdependence among countries in Africa.
“Unlike geography or distance, we find that the channel through which this interdependence is propagated is intra-African regional trade.
“Our result holds important implications on the need to promote regional value chains in Africa and the active role African Continental Free Trade Area (AfCFTA) must play in this regard.
“Evidence also shows that there is a window of opportunities for African countries to collaborate to advance industrialisation by increasing intra-regional trade.”
Discussing the paper, Mr Jacob Assa, Senior Strategic Advisor, United Nations Development Programme (UNDP) said the research was relevant to understanding Africa’s industrialisation path.
“This is useful for benchmarking, because then you can see that some countries in Africa are at the same level as countries in Latin America or East Asia and do cross-regional analysis,” Assa said.
In another paper titled “Explaining Capacity Utilisation among Firms in Kenya,” Kefa Simiyu, said the study revealed issues around capacity utilisation.
He said the issues include financial challenges, corruption, informal competitions and transportation hurdles.
”It also shows that capacity utilisation declines as enterprises within a sector become less close, indicating the impact of social interactions on operational efficiency.
”Findings also show that experienced female top managers emerge as a positive force, significantly raising capacity utilisation within enterprises.
”Underscoring the importance of gender diversity in top-level management,” he said.
Simiyu said the study suggested that informal competitions could raise capacity utilisation.
”The paper advocates for robust institutional strengthening to curb corruption, emphasising the need for economic, judicial, and governance reforms,” he said.
Discussing the findings of the paper, Mr Ali Zafar, Senior Economist, UNDP, said it was an “out of the box’ thinking that looked at several parameters previously ignored, including capacity utilisation, finances, corruption, gender dimension and the network effect.
The session also featured a paper by Andre Tsambou on the interplay between innovation adoption and pricing competitiveness in sub-Saharan Africa.
According to Tsambou, the paper recommended strong link between investment and innovation, and strengthening of firms.
“Efforts aimed at improving enterprises should also focus on improving technology and non-technology innovation on the continent,” he added.
Discussing the paper, Yesus Awel of the Economic Commission for Africa (ECA), said innovation and competitiveness were key to strengthening industrialisation.
He however called for a deeper analysis of the study.
In another presentation on “Terrorism and the Performance of Manufacturing Industries in Developing Countries,” Charles Zambo said industrialisation play crucial role in jobs creation, innovation, infrastructure development, and increasing income.
According to Zambo, terrorism has many consequences on the economy, including loss of lives, destruction of vital infrastructure, slowing economic growth, deterioration of safety and stability, and precipitating migration.
He said the paper recommended that it was important for governments to reduce the risk of tension within countries.
“They should ensure that, even in times of instability, sufficient resources are always allocated to research and development for the well-being of populations.
“They should also strike the right balance between military spending and investment spending so that the former does not get in the way of the latter,” the expert said.