Public Agenda (Accra)
Frederick Asiamah
24 November 2008
Accra — UN Secretary General, Mr. Ban Ki-Moon has prescribed the processing of raw materials as the solution to African economies in the wake of the global financial crisis.
"A slowdown in the global economy will hit exporters of primary products hard," he warned in a message to Africans on the occasion of the 19th Anniversary Celebration of the Africa Industrialization Day (AID) which fell on November 20.
The Secretary General noted that primary products accounted for more than 50 percent of the value of Africa's exports and cautioned, "This makes the continent especially vulnerable to global economic shocks."
Mr. Daouda Toure, UN Resident Coordinator, Ghana, delivered Mr. Ki-Moon's message at a ceremony organized in Accra on Thursday by the Association of Ghana Industries (AGI) in collaboration with the Ministry of Trade, Industry, PSD & PSI to commemorate the occasion. The AID was under the theme: "Processing of Raw Materials for Sustainable Industrial Growth and Development." The ceremony was also used to kick-start the 8thNational Industrial Week.
Unlike previous celebrations, this year's AID comes at a time the world faces global financial crisis. Food and fertilizer prices are significantly higher than they were a couple of years back. And, the accelerating impacts of climate change are becoming more apparent.
In the estimation of Mr. Ki-Moon, "The full impacts of these crises are not yet known, but some of the effects are being felt already and there is a clear risk that recent improvements in social and economic indicators could be eroded or reversed."
He appeared to figure out the panacea: "It is essential for Africa to be able to process its raw materials into higher-value products, both for domestic consumption and for exports." And, there examples to emulate; "Malaysia and Thailand, for example, are among the countries that have progressed rapidly by moving into processing their primary and mineral products into high-value-added products," the UN Secretary General cited.
He gave further proof to why Africa - Ghana included - should take processing of raw materials seriously. "More than half of Africa's people are employed in the agricultural sector. This makes it essential to develop the agri-business and agro-processing industries."
He concluded his message with the argument that industrialization has led to broad-based development and economic transformation in other parts of the world. "It can and must do the same in Africa," He insisted.
The Africa Union (AU), the UN Economic Commission for Africa (UNECA) and the UN Industrial Development Organization (UNIDO) could not but agree with the UN Secretary General. In a joint statement delivered by Mr. Napoleon Gbolonyo, the three bodies stated, "There is a need for renewed and intensified efforts to produce and trade in finished and/or semi-finished products which, as the experience of the Newly Industrialized Countries has shown, yield higher returns and generate the resources required for accelerated industrial development."
Presently, Africa contributes a meager one percent to global manufacturing due to many obstacles. It has relied heavily on trade in commodidites thereby failing to transform its industrial landscape. And, with many of its people living on less than one US dollar a day, the achievement of the Millennium Development Goal (MDG) of halving poverty by 2015 remains a daunting task for many of the continent's countries.
According to the AU, UNECA and UNIDO, Africa needs to first deal with the challenges that continue to hamper its productivity and competitiveness. "In particular, supply side challenges and constraints, which remain a persistent problem for African industrial development, need to be addressed." The three organizations identify the creation of a conducive and coherent policy environment as a necessity. "Equally important, is the need to upgrade skills, stimulate productivity, promote investment, provide adequate infrastructure and transport facilities, modernize enterprise operations, transfer technology "
The three bodies, however, agreed that the road has not all been rugged; it has also been smooth. Especially, in recent years, Africa has witnessed improved economic growth which has averaged 5.5% per annum. But then again, this growth is largely owed to the boom of commodity prices.
In Ghana, growth has averaged 5.2%, though agriculture's growth has averaged 5.5%. Agriculture accounts for 40% of Gross Domestic Product (GDP), contributes three-quarters of export earnings, and employs some 55% of the labour force. But Mrs. Leticia Osafo-Addo, Managing Director of Processed Foods & Spices Ltd., has observed that the past growth of agriculture "has been primarily driven by extensive forces" like land expansion, "rather than increased productivity."
She joined the call for a focus on value addition: "Everything must be done to let the processing of agricultural raw materials hold for a sustained economic development of Ghana."
To ensure this, "We want to see the government fostering an enabling, competitive and rewarding business environment and ensuring the radical dismantling of bureaucratic restrictions and impediment of operating business effectively and profitably in Ghana.
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