SADC must reform: ED | Business Times

CLOUDINE MATOLA

President Emmerson Mnangagwa declared yesterday that although the economies in the Southern Africa Development Community (SADC) region have proven to be incredibly resilient to multiple shocks, their structural transformation has been sluggish.

Imperative data shows that significant structural shocks and hurdles are plunging SADC economies, which has caused a slowdown  in real gross domestic product (GDP). The SADC economies are also contending with limited access to capital, weakening currencies relative to all major currencies, particularly the greenback.

Other problems facing the economies include harsh economic conditions characterised by multiple shocks, escalating trade and tech wars, supply chain disruptions, inflationary pressures brought on by rising commodity and energy costs, and abandonment of the rule based multilateral trading system.

Furthermore, the SADC region’s economies are grappling with elevated levels of debt stock and associated sustainability problems.

Officially opening the SADC Industrialisation Week yesterday in the capital Harare, President Mnangagwa   underscored the necessity of structural transformation and the need for their institutions to be strengthened in order to support the implementation of prudent policy measures and strategic interventions.

Many SADC economies have been heavily dependent on traditional, low-productivity sectors like agriculture or SMEs sector for growth and employment due to poor structural reform.

According to analysts, strategic investments in important Sustainable Development Goal areas including education, energy, productivity-enhancing technology and innovation, and productive transport infrastructure are necessary for SADC countries to achieve significant structural transformation.
In order to join global value chains, President Mnangagwa pleaded with the economies in the SADC region to accelerate the domestication of regional value chains.

According to him, national development strategies must align with the broader development agenda.

“Our SADC region has immense potential to accelerate the structural transformation of our economies, anchored on increased production and productivity. It is critically important, therefore, to scale up the domestication of regional value chains towards our entry into global value chains,” President Mnangagwa said.

He added: “The present generation has a duty and obligation to foster environments and synergies that leapfrog industrialisation, create more jobs, produce value added goods, as well as increase exports and export earnings. Equally, we must improve efficiencies in our resource allocation and create the requisite linkages across all sectors of our economies to drive this noble and urgent agenda.

“For the SADC region to propel the industrialisation initiative, we cannot work in silos, both in terms of in-country and cross border cooperation.

“Hence, by and large, there is need for our national development strategies to be in sync with the broader development agenda.

As such, agriculture and agribusinesses, along with our regional energy, water, transport and port infrastructure, as well as trade routes should be developed in a collaborative manner.

“Greater commitment must be demonstrated by all stakeholders to the full implementation of our policies such as the Regional Indicative Strategic Development Plan. As it was during the liberation struggle, we are separate countries but one region, with one common future.”

Additionally, President Mnangagwa exhorted industry to throw off its cry-baby mentality.

“The time has come for industry to become mature and cease the “cry-baby mentality,” Mnangagwa said.

He continued: “I urge member states and stakeholders across our region to scale up transformation of our domestic industries. Let us not shy away or delay embracing the latest developments in emerging industries underlying the Fourth Industrial Revolution.

“These include artificial intelligence, robotics, biotechnology and the use of renewable energy, among others.

“Greater innovation must be deployed to lower the unit costs of production, enhance information exchange, and lower transaction costs to further help our economies to develop new value chains, while strengthening existing ones.”

President Mnangagwa did concede, nevertheless, that the industrial sector in Africa has trouble obtaining long-term, reasonably priced financing.

“This has in turn curtailed and retarded the modernisation of Africa’s industrial base. For us in Zimbabwe, limitations in this regard have been worsened by the illegal economic sanctions imposed on our country,” President Mnangagwa said.

He added: “Given the scale of finances needed to ensure the success of our regional industrialisation agenda, we must think outside the box for innovative financing models. Focus must remain on what we have and what we control; this being the use of our domestic resources to propel our industrialisation and development agenda.”

“The weighty obligation to build, develop and industrialise our economies lies with us, the people of this region, SADC, and the continent.

“The need to formalise and operationalise the SADC Regional Development Fund has become urgent. Similarly, domestic pension funds, Sovereign Wealth Funds and other Public-Private Sector frameworks, must be deployed to play a more pivotal role in the implementation of our industrialisation agenda. In addition, the financial services sector is called upon to provide responsive financial packages that facilitate our collective quest for an industrialised SADC region.”

He said the current crop of leaders within the SADC region and Africa in general, are “committed to the industrialisation agenda and intra-African trade.

“We will, therefore, continue to create an enabling fiscal policy and regulatory environment, with a particular focus on cross border infrastructure and efficient trade.

“Under the Second Republic, the ease of doing business has tremendously improved and bureaucratic red tape drastically reduced. This has seen us realise unprecedented economic growth and Foreign Direct Investment, while nurturing entrepreneurship, especially among youth and women led SMEs and start-ups.”

According to President Mnangagwa, regional integration is a key component of the SADC Industrialization Strategy.

“As such, member states are called upon to fast-track the ratification of our SADC Protocol on Industry. 15 Through working together, within SADC and other Regional Economic Communities, we will undoubtedly realise win-win benefits under the African Continental Free Trade Area for the shared prosperity of the peoples of our great continent of Africa,” he said.

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