SADC pushing for beneficiation, increased value addition

Wednesday, August 16, 2017

While Southern Africa is making progress towards promoting regional integration, there is a greater need to push forward with industrialisation, beneficiation and increased value addition in the region.

The Southern African Development Community (SADC) says these three components are the building blocks of raising the standard of living of the people of the region. Done right, they drive momentum towards stronger intra-SADC trade.

As it stands, intra-SADC trade remains very low at only below 17% of total SADC trade. While the region is endowed with abundant and diverse natural resources, productive sectors do not practice value addition.

“We have found that trade among ourselves sits at less than 20%. This means we have less jobs and less development, as we are exporting [raw products]. We should at least have minimum intra-trade of 50%, which will improve the living conditions and development of the region,” said SADC Deputy Executive Secretary for Regional Integration, Thembinkosi Mhlongo, on Wednesday.

He was part of a panel, together with International Relations and Cooperation Minister Maite Nkoana-Mashabane, which discussed the issues on the agenda for the 37th SADC summit underway in Tshwane.

Minister Nkoana-Mashabane said the region took a decision to focus on industrialisation so that countries don’t remain exporters of raw materials.

“We are a very unique region on the continent. We live in a very rich and mineral endowed region yet we have the poorest people. We want to turn that corner by focusing on beneficiation in each of our countries and by integrating our economies and skilling adequately our youthful population,” said the Minister.

The Minister said the entire value chain, as well as the integration of people and services must be looked at if value addition is to happen effectively.

SADC has prioritised improving value chains as a way of creating attractive and competitive investment around agro-processing, mineral beneficiation and service delivery.

“There are ongoing processes to ensure that Africa transits to value-adding, as this can unlock much more benefits, but there remain deep-seated structural fault lines in SADC, with low levels of exports,” Minister Nkoana-Mashabane said.

Mhlongo echoed her sentiments, saying the right skills and technologies will increase SADC’s competitive edge, and create employment and self-sufficiency, while producing quality goods and services to attract trade partners.

“To achieve industrialisation, SADC member states need to integrate in global value chains and upgrade in global value chains by moving to higher value adding activities,” Mhlongo said.

Regional infrastructure must evolve to keep up

The panel identified the lack of interconnectivity and poor transport within the region as the key stumbling blocks for SADC to fully move forward with industrialisation and beneficiation.

“We have been addressing this and we think that… we will be able to close the gap,” said Mhlongo.

He cited the SADC Industrialisation Strategy and Roadmap 2015 – 2063, which aims to accelerate the thrust towards strengthening the comparative and competitive advantages of the economies of the region.

The primary orientation of the strategy is the importance of technological and economic transformation of the SADC region through industrialisation, modernisation, skills development, science and technology, financial strengthening and deeper regional integration.

It is also anchored on three pillars, namely industrialisation as champion of economic and technological transformation; competitiveness as an active process to move from comparative advantage to competitive advantage, and regional integration and geography as the context for industrial development and economic prosperity.

Mhlongo went on to call for public-private partnerships (PPPs) to avail themselves and drive projects forward.

He also underscored the need for governments to engage the private sector, which could play a complementary role in expanding services and infrastructure development.

PPPs are regarded as a viable model for attracting investments for public projects by allowing governments to have more access to additional capital.

“We need a big role from the private sector, which can … mobilises finances for investment in value chains,” said Mhlongo, noting that the sector has been keen and coming on board. –

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