With the adoption of the Southern African Development Community (SADC) industrial development policy barely a week ago, global eyes are now on how SADC’s 14-member states would get in sync for an effective implementation of this overarching strategy, as individual SADC countries, including Namibia, implement own country-specific industrialisation strategy. The private sector too is being critically looked at, as private sector role “is critical”.
Experts caution against heralding the adoption of the strategy itself as the raison d’être, saying while time was ripe for the southern regional economic bloc to adopt the strategy, an effective and successful implementation “requires a new thinking about trade and industrial policy instruments” across all 14 SADC countries, says the South Africa-based Trade Law Centre for Southern Africa (TRALAC).
TRALAC is a not-for-profit think tank on trade and commerce in the region.
“For the industrialisation strategy to work requires a shift in the mindset of leaders, who are inclined to favour sovereign issues over regional priorities and plan according to election cycles,” commented Johannes !Gawaxab the Executive Chairman of EOS Capital, a local private equity firm.
In itself, the adoption of the SADC industrial development strategy is a major transformation, more so for Namibia who just began her earnest implementation of industrialisation strategy, which just like SADC’s, had a gestation period spanning eight years.
Indeed, the global economic tide has turned to exert a tightening choke on what has been until hereto the manner in which Africa trade with the rest of the world, and each country has moved on to adopt internal industrialisation strategies that bolster intra-economic boom.
“Namibia is on the brink of major transformation and the SADC industrialisation strategy is an important element to advance both economic and social development in the sub-region and our country,” commented !Gawaxab.
TRALAC, in last week’s analysis, welcomed the adoption of SADC industrial development strategy saying “industrialisation matters in the 21st century” as it “remains important for economic diversification”.
Nevertheless, !Gawaxab says the real litmus test for any strategy lies in its implementation and execution. He points at the SADC Free Trade aggrement that was agreed in August 2008, but maximum tariff liberalisation was only attained in January 2012.
TRALAC says a successful roll out of SADC industrial development would depend on a surgical approach of the three critical components on which the strategy stands. These include “a deep integration approach to support trade and production linkages which seek to remove 21st century behind the border trade barriers, a new approach to preferential rules of origins in SADC which makes them more flexible in line with the nature and scope of 21st century global product and trade”, and “a co-operative approach, which entails specific interventions on regional collaboration in industrial upgrading through innovation, technology transfer and research and development”, among others.
“The SADC countries are at different levels of development, have different interpretation of what democracy constitutes and a pragmatic implementation plan should be considered. Instead of driving the new strategy across all countries, implementation first at bilateral level and then extending it
to the next country will contribute largely to the success of the strategy,” says !Gawaxab.
He says regional integration is crucial for addressing the challenges presented by the region’s small markets and low levels of intra-SADC trade. Big markets and greater economies of scale would make the sub-region more attractive for investment. “For industrialisation to be successful, we need to increase investment in the domestic market, produce products that are competitive in terms of price and quality, provide access to cheap energy and complement this with robust port, rail and road infrastructure to link countries more effectively,” he says.
In addition, for industrialisation to be successful and to improve the region’s competitiveness, !Gawaxab says there is a need to remove non-tariff barriers, develop skills, harmonise visa and customs regimes for the free movement of people and goods, exploit linkages in the value chain and improve on the difficult and expensive logistics.
The SADC industrialisation strategy is anchored on three pillars of industrialisation, competitiveness and regional integration, and premised on a three-phase long perspective covering the period from 2015 to 2063. The industrialisation strategy is aligned to the continental vision, Agenda 2063, a global strategy aimed at optimising the use of Africa’s resources for the benefit of all Africans.