AFRICAN UNION UNION AFRICAINE UNIÃO AFRICANA Addis Ababa, ETHIOPIA P. O. Box 3243 Telephone : 0115517700 Fax : 0115517844 Website: www. au.int Parallel Session on Regional Value Chains And Mobilization Manufactures to pave the way of Pan-African Manufacturing Association CONCEPT NOTE 19 th -21 st November 2018 AUC Headquarter, Addis Ababa, Ethiopia As side event of the Africa Industrialization week 2018 1
1. Background and Rationale 1.1. Over the last two decades, Africa has experienced a period of rapid economic growth and structural transformation. For instance, Africa s GDP in US dollars grew from 587 billion in the year 2000 to 2,545 billion in 2016. Apart from this noticeable growth in production volumes, Africa also displayed some measure of resilience to commodity price cycles exposure due to some improvements in the level and scope of value addition in its exports. 1.2. In recent times African leaders have weathered the adverse effects of political instability whilst at the same time demonstrating some measure of domestic capacity to manage the risks associated with natural disasters. For the first time foreign and African diaspora investment back in the continent exceeded the amount of illicit financial flow, a trend that is showing a renewed confidence in Africa s economic potential and a deepening integration into the global financial market. 1.3. This positive development is on account of enhanced capacity in the implementation of sound macro-economic policies across many countries and deep political and economic reforms. This has no doubt boosted the prospects for a resurgence in African private sector growth, supported by deliberate policies to improve the business-enabling environment through dismantling business regulatory barriers. Such positive policy developments have given rise to the emergence of probusiness environments, and investor friendly regimes in some African countries, thus nurturing conditions conducive for the survival and growth of the enterprise sector. 2. Leveraging emerging opportunities for industrialisation 2.1. With an urban population comparable to China (and far greater natural resources) Africa s economic potential is almost limitless. Structural transformation can create prosperity for Africa by shifting financial, natural and human resources from low-productive agrarian or resourcebased sectors to more productive industrial or service-based sectors. This transformation could allow the continent to reap its demographic dividend, with reference to the growth of its gross domestic product that 2
could materialize due to the expected doubling of the continent s workforce to almost two billion by 2050 (Li Yong, 2016). 2.2. Africa might also be able to harness an urbanization dividend, due to the increased migration of the population from the countryside to cities (AfDB-OECD-UNDP, 2016). In fact, industrialisation is key if we are to achieve the Sustainable Development Goals by 2030, in particular SDG9 Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation. 2.3. However the promise of an African prosperity for the African people will only be fulfilled if the private sector and particularly manufacturers seize the momentum of the on-going economic transformation. An integrated market means considerable incentives for existing businesses to expand their production base and market reach. The greatest opportunity for the continent s private sector has been availed by the launch of the AfCFTA, a significant development that will reshape Africa s social and commercial relations. 2.4. The AfCTA will usher in a new trading regime, availing an invaluable opportunity for structural transformation, and hence sustainable and inclusive industrialisation. This will no doubt, boost prospects for member states to reorganise their production functions, stimulating enterprises competitiveness, whilst at the same time leveraging their abundant natural resources through the development of regional value chains. It means also a greater competition for the opportunities both from indigenous champions and upcoming international competitors. 2.5. The transformation of African economies in order to create shared growth, decent jobs and economic opportunities for all is one of the priorities of the new vision of the continent, proclaimed by the Heads of States and Government of the Africa Union in their 50th Anniversary Solemn Declaration in 2013: Agenda 2063 which is A Global Strategy to Optimize use of Africa's resources for the benefits of all Africans". It defines The Africa We Want, envisioning an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena. 3
2.6. Industrialization has been identified as one of the key pillars that will drive social and economic structural transformation in the next 50 years through beneficiation and value addition to natural resources. Thus, Agenda 2063 is an opportunity to undertake massive and bold industrialization of Africa. 3. Objectives 2.7. It is against this background that the Department of Trade and Industry (DTI) of the African Union Commission will hold a continental forum on Regional Value Chains. The event will provide a platform to highlight challenges and issues that are impacting the African manufacturing industry currently, and will set out to seek for innovative ideas to promote African market attractiveness and move the industry forward over the next decade. 3.1. The overall objective of the forum is to facilitate dialogue and engagement that will produce concrete actions that will promote Made in Africa by harnessing high-level political and private sector commitments and workable solutions. 3.2. It seeks to build strong policy advocacy on how the continent could reorganize its production system through regional value chains so as to enhance more inter-industry, intra-industry as well as intra-regional trade to advance the Africa s industrialisation agenda. 3.3. It will also pave the way for the establishment of an African Manufacturer Permanent Forum to contribute to the ongoing effort to revitalize the continent s industrialization. The forum will; - Provide a platform for informative and interactive sessions with the prime movers of manufacturing sector across various spheres like government, policy makers, industrial leaders, academia and potential investors; - Discuss Transformative Industrial Policies in Africa - Discuss current issues, challenges and developments in the manufacturing industry and how to improve competitiveness; - Debate the challenges and opportunities facing SMEs in the manufacturing sector; 4
- Highlight incentives available to ensure foreign investment and aid the establishment of global companies in the manufacturing sector; - Draw attention to new potential growth areas and showcase manufacturing opportunities in order to provide financial assistance as well as access to finance to industrial players; - Connect with capital and financing sources; - Facilitate and forge business to business partnerships; - Pave the way for the establishment of an African Manufacturers Association 4. Participants Participants and delegates to the Forum will include; i. Manufacturers Associations (National, Regional) ii. Small, Medium and Large manufacturing companies iii. Financial institutions and banks (AfDB, AFREXIM bank, BADEA, Trade and Development Bank(COMESA Bank),ECOWAS bank for Investment and development, East African Development Bank, Development Bank of Southern Africa, CEMAC, Banque Sahélo-Saharienne pour l'investissement et le Commerce, iv. Manufacturing development agencies v. Regional Economic Communities (RECs) i.e ECOWAS, SADC, COMESA, AMU, EAC, ECCAS, IGAD, SEN-SAD vi. vii. viii. ix. Private equity investors Industry sector specialists /Consultancy Organizations African Union Commission United Nations agencies; UNECA, UNIDO x. (African) Academic and Research Institutions 5. Event Format The event will take the format of a Symposium, with a presentation of key issues, followed by 4 panel discussions. The discussions will be guided by a moderator. A. Panel discussion 1 :Transformative Industrial Policies in Africa B. Panel discussion 2: Improving competitiveness in Africa s manufacturing C. Panel discussion 3: SME Development D. Panel discussion 4: Financing Opportunities 5
Way forward and launch of African Manufacturing Association 6. DATE AND VENUE 7. Date: 19 th to 21 st November 2018 Venue: AUC headquarter, Addis Ababa, Ethiopia As side event of the Africa Industrialization week 2018 8. WORKING LANGUAGES English and French will be the working languages of the conference. 9. CONTACTS PERSONS African Union Commission 1. Mrs. Ron Osman, Senior Policy Officer, African Union Commission P.O Box: Box 3243, Addis Ababa, Ethiopia, Tel: +251 11 551 7700 ext: 2965 Email: OmarR@africa-union.org 2. Rongai Chizema,. 6