Achieving sustained growth in Africa, coupled with addressing some of its key challenges, requires a concerted focus on successfully implementing industrial policy, economists noted during a discussion at the launch of the African Programme on Rethinking Development Economics (APORDE) Alumni Network this week.
Other key themes from the discussion included that the experience of South Africa, Ethiopia and Nigeria revealed the importance of industrial policy, which is dynamic and takes into account the context of different economies and sectors.
Moreover, addressing constraints was noted as necessary across Africa to ensure countries are internationally competitive for realisation of export capacity.
At the same time, a successful industrial policy should not be seen in a narrow way and should be aligned with other key policies such as macroeconomic policy, the discussion revealed.
In opening the launch event, APORDE co-course director, Rhodes University Economics Department senior lecturer Niki Cattaneo explained the origins of the APORDE programme, which began with the aim of building capacity and a network of heterodox development economists and social scientists in Africa.
The programme has trained about 600 policy-makers, researchers, academics and civil society representatives over the past 15 years.
The aim of launching the APORDE Alumni Network is to create a platform for people to connect and enrich, and strengthen their ideas in relation to industrial policy and economic development with the aim of building a community of practice, explained APORDE scientific committee chair Christopher Cramer.
This comes with the aim of contributing towards policy ideas and design in support of sustained growth and structural change, and to address some of the profound challenges facing Africa – such as poverty and unemployment.
In addressing some of these challenges, Ethiopia senior Minister Arkebe Oqubay, who is noted to have been central to industrial policy in Ethiopia for the last 30 years, highlighted the need for African countries to embrace the critical role of industrial policy in driving structural transformation and economic catch-up.
He pointed out that implementing industrial policy is complex and needs to be dynamic and not rigid, nor uniform across sectors or countries.
Rather, it has to allow for changes to take into account global developments, as well as those in domestic economies.
While highlighting the role of the State in relation to the market and the importance of research and dialogue in influencing the policy-making process, Oqubay stressed the importance of African countries embracing and elevating their efforts to ensure they are internationally competitive with export capacity.
This, he urged, is critical for every single country in Africa.
If dealing with unemployment is critical, then the continent needs to focus on economic diversification and productive transformation, Oqubay emphasised.
He further argued that industrial policy should not be seen in a narrow way, but rather, that it has to synergise with other policies including skills development, urban planning and macroeconomic policies.
Picking up on this issue, former South African Trade and Industry Minister and member of the Industrial Advisory Council of the African Continental Free Trade Area (AfCFTA), Dr Rob Davies, pointed out that there has to be alignment between industrial policy and other policies such as macroeconomic policy.
This, he stressed, has not happened in South Africa.
He reinforced some of the points raised by Oqubay, in relation to the fact that a successful industrial policy needs to be the product of intense consultation with both industrialists and labour, while noting that such processes are complex and influenced by a range of factors, such as the nature of the political economy.
Davies pointed out the power of different lobbying groups in influencing policy.
He highlighted the role of research in shaping policy, especially in relation to sector programmes.
In this vein, he stressed the role of research in the sector masterplan processes, which have become central to industrial policy in South Africa.
Davies also said a successful industrial policy has to be seen widely in each society as a priority, noting that “what we have seen in South Africa is that it is not seen as a priority”.
Commenting on the role of the AfCFTA, he said it provided an opportunity for Africa to create an integrated market to build regional value chains.
He added that the free trade agreement could be an opportunity to create some synergy with industrial policy and support industrial development in African countries.
In line with the views expressed by Davies and Oqubay, special adviser to the President on Economic Matters in Nigeria Adeyemi Dipeolu stated that African countries cannot achieve rapid industrialisation without industrial policy.
He pointed out, however, that, when discussing industrial policy in Africa, what needs to be factored in is what emerged in the post-colonial era and industrialisation processes, which unfolded to varying degrees of success.
Dipeolu stressed that the continuing challenge to industrial policy is in relation to the “market place” for ideas and the continued influence of neo-liberalism, which previously was not supportive of industrial policy.
In speaking to the importance of the Alumni Network, Trade & Industrial Policy Strategies executive director Saul Levin concluded that the network could play an important role in terms of taking forward African economic development, as it provides a platform for the sharing of insights, new thinking and ideas.