Import substitution, setting up of industrial hubs and undertaking accurate diagnoses of skills have been identified by experts as some of the starting points for industrialization and economic diversification with the Central African sub region.
The recommendations were made international experts during a videoconference on the theme: “Skills for Economic diversification in Central Africa: leveraging experiences from successful comparators and building partnerships”
The virtual event was organised by the United Nations Economic Commission for Africa (ECA) as part of the second segment in a series of interactive meetings.
The meeting are taking place in the build up to the 36th session of the Intergovernmental Committee of Senior Officials and Experts (ICE) for Central Africa.
The committee meeting is expected to hold later in 2020 under the theme: “Skills for Economic Diversification in Central Africa”.
The virtual meeting of international experts identified inadequate development of skills and low productivity as impediments for the competitive and economic diversification potential of Central African countries.
Inspired by the experiences of Ethiopia, Japan and South Africa, experts identified human resources development as vital to building prosperous economies that are resilient to external shocks.
The Efficient Skills System
The Head of Section for Economic Diversification Policy and Reforms of the Central Africa Sub-regional Office of ECA, Jean Luc Mastaki, explained that an efficient skills system should be responsive to the demands of the market, including industry, businesses, the public sector, the private sector and employers.
He argued that skills creation system must provide products ready for use which would match the layers of the division of labour of enterprises.
He also recommended Special Economic Zones (SEZs) as key factor of industrialization.
The Japanese Experience
The Japanese experience was presented by Shoko Yamada of Nagoya University.
She recommended transnational Special Economic Zones SEZ model for Central African countries.
To her specializing in the processing of mineral and other natural resources in line with their comparative advantages in the zone can easily produce a spill-over effect for similar actions in other economic sectors.
Three key lessons from the Japanese experience include: “positioning technology as an engine of growth, adapting training programs and policies and undertaking accurate diagnoses of skills as a starting point for industrialization and economic diversification.”
The Ethiopia Experience
Economic diversification hinged on an import-substitution policy was explained Nabiyeleul Gessese Zellele, an Ethiopian academic specialized in industrial and chemical engineering.
In a move toward economic self-sufficiency, the Ethiopia’s leaders prioritized three sectors: aviation, agribusiness and leather manufacturing. The country has developed know-how, and export goods and services to African and Western markets alike.
In the leather sector for instance, joint ventures accounted for 3%, foreign direct investment 45% and local investment 52%.
He also highlighted the key advantage of setting up an industrial hub with concentration of companies in a unique location. It will develop a great pull-factor of foreign direct investment.
The South African Experience
The Executive Director of the African Climate Foundation, Saliem Fakir, demonstrated that through joint ventures with foreign companies, South Africa has benefitted from technology transfer to boost its skills set for economic diversification.
The essentially mining economy also exports manufactured products, experiences and knowledge thanks to functioning manufacturing industry in armaments, oil refining, and cement production.
Training of skilled workers for industrialization, economic diversification and Special Economic Zones has help South Africa to develop high level of expertise. He pointed to readapt existing skills for new industries.
The Director of ECA’s Sub-regional Office for Central Africa, Antonio Pedro, urged countries of the sun region implement the recommendations.
He added that the industrialization and economic diversification agenda requires the efforts of several stakeholders to allow Central Africa to make a qualitative leap towards the desired new and transformed economy.