SADC Industrialization Week: Looking beyond aid, export-led models

13Aug 2019
Miki Tasseni
Dar es Salaam
The Guardian
SADC Industrialization Week: Looking beyond aid, export-led models

LISTENING to what high level guests speaking at different moments of the 4TH SADC industrial Week and Exhibition, one impression that stood out was that there is a thrust towards identifying economic energy within the countries and the zone as a whole.

They are focused on what can be harnessed, traded or done in the zone or within the vicinity, not where SADC stands in global trade or aid expectations. This is rather different from the East African Community context, partly because SADC had fewer institutions, projects and agencies.

When Zanzibar President Dr Ali Mohamed Shein made an appeal that SADC states need to ratify protocols and implement them, the point was that the process of forming regionally cohesive thrust towards industrialization for that matter must be owned up substantially.

A particularly relevant instrument that the Isles leader mentioned that it needs to be fast tracked was the regional 2015-2063 industrial drive, which must be underscored by developing industries and procuring intra-SADC products. It is as if there is a policy format, but it needs legislative actions and binding regulations, which must be agreed upon.

In what appears to have been an effort at synthesis of rather disparate themes or tonalities of economic policy which clash at the substance level, the 2019 SADC Industrialization Week was conducted under the theme ‘Competitive Business Environment for Inclusive and Sustainable Industrial Development.’

There are two aspects there which ordinarily draw scholars from different sides of panels or enthusiasm among the crowd, one that is likely to be a majority wishing for inclusive and sustainable industrial development, while the other side pushes for a competitive business environment.

Questions still linger if the Week showed more in relation to competitive environment or an inclusive one.

Listening to the remarks by Dr Shein, it is arguable that his principal area of concern is self-reliance, where the pivotal aspect is local products gaining space in what we consume, and an inclusive element in the sense of breadth of job opportunities, supply chains, etc.

The Isles leader said ‘we must build a culture of loving our own products and do away with hiring experts from abroad. There should be efforts to ensure technological advancement to realize our industrialization strategy, enhance intra-regional trade and increase market and employment opportunities.’

The issue is how this need relates to a competitive business environment, whether it is embedded in it or it comes up as a regulatory requirement since the market, or competition, ‘will always fail.’

While delegates to the Industrialisation Week would have had opportunities to compare experiences and take note of this or that expectation, it is the overall decline of macro-economic projections that would occupy business strategists, and their voices were scarcely audible in the conference. 

Contributions from top officials of private sector organizations and commercial banks tended to echo government optimism on regulatory improvement and investments that are focused on industries, as a policy format to create jobs.

This is a rather weak parameter in the SADC industrialisation thrust as a whole, that it is not driven by the demand for goods but by a demand for jobs. That can be critical.

The sort of elaboration that comes up is well intentioned but stronger in its ethical aspect as to regional cooperation rather than its forecasting element, though presumably it is intended to be read also as expectation of what is likely in terms of explicit economic decision making.

It is the policy thrust that ‘SADC member states can create market and employment opportunities through establishment of industries and procurement of locally made goods,’ which points to the need for ‘innovation and value addition on locally manufactured products so that they compete with imported goods.’

There is a problem of vision on how domestic brands are created, as it is by importing a big brand and it purchases a local company with a similar product, and it vehicles that brand or uses the local brand but with ‘next level’ technology, etc.

References to absolute potential for the region is usually whetting for the appetite, but translating into market numbers, that is, level of effective demand, is a different matter.

The guest of honor said that ‘SADC has an integrated market of 16 countries, a combined population of 327 million and a GDP of about $ 599 billion,’ which doesn’t quite project the state of consumption and what intra-trade can achieve, and what to do with the large amounts of industrial raw materials that characterize each other’s agriculture.

To suggest that member states ‘should advance their Information and Communication Technology (ICT) capacity to cope with globalization, technology advancement and be able to search for markets online,’ is something that works for individual market entrants, but for countries as a whole, it is the whole problem of opening up which must be emphasized.

That is the logic of the Economic Partnership Agreement with the European Union which has been signed in patches by SADC members or rather African Union members as a whole.

With the Continental Free Trade Area and the wish to upgrade the condition for doing business as well as cut trade barriers, it might soon be realized that the biggest barriers are in trading with Europe and the United States (and others besides) and the minor barriers exist in the region.