African countries are making significant efforts to develop a vision for industrialisation.
By Kudzai Goremusandu
At present, about half of these countries have an industrialisation strategy, many of which aim to improve entrepreneurship.
But few address the role of firms with high-growth potential effectively, in particular young small and medium-sized enterprises.
Strategies need to better target such firms, which are important for industrialisation.
In designing strategies, governments should consider certain industrial policies and draw lessons from past experiences.
Carrying out industrialisation strategies remains a challenge for many countries such as Zimbabwe.
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Successful strategies require strong political leadership and the full commitment of all levels of government.
Sub-national governments’ participation can help tailor policies that better suit firms’ local needs, provided the governments have the necessary capabilities and can ensure transparency.
Co-ordination between government bodies and private sector involvement in policy-making can help implement industrialisation strategies more effectively.
Finally, policy monitoring and impact evaluation are crucial to make industrialisation strategies more efficient.
Such assessments can serve to reward well-performing institutions and revise policies, but reliable data is needed.
Botswana, Ghana, Mauritius and South Africa rank higher in their capability to implement industrial policies than some Asian competitors.
Different levels of government can fulfil distinct functions to carry out industrial policies.
Participative strategies can unlock the potential of Zimbabwe’s economic agents, including entrepreneurs, and secure the population’s ownership.
Strategies should be more than a collection of sectoral policies, they should provide an overarching framework for balancing sectoral policies, macroeconomic policies and place-based policies.
Strategies should take a close look at the potential of different places and regions including at sub-national and cross border levels.
Some African industrialisation strategies prioritise private sector development, including entrepreneurship.
For instance, Ethiopia’s Industry Development Strategy identifies small and medium-sized enterprises (SMEs) as an important sector domestic entrepreneurs and for employment creation.
The strategy dedicates federal and regional agencies who work with municipalities to support SMEs.
Through close consultation with the private sector, these agencies provide management training and strengthen SME financing via sources such as capital goods leasing companies.
Mozambique’s national development plan also aims to encourage the private sector to invest in and develop SMEs.
Industrial policies can be defined generally as the “active promotion of structural change and new economic activities of high potential in all sectors”.
African countries are adopting different policy packages depending on their specific needs.
In Morocco, the Industrial Acceleration Plan 2014-2020 (PAI) aims to increase industry’s contribution to 23% of gross domestic product by 2020 and create 500 000 new jobs.
It builds on the strengths of sectors such as automotives and aeronautics that were previously prioritised under the National Pact for Industrial Emergence 2009-2015.
PAI employs a number of instruments to foster growth and competitiveness, particularly the massive development of infrastructure in industrial clusters.
PAI has created a $2,2 billion fund to identify and fill in the financing gap in industrial development.
In South Africa, Industrial Policy Action Plans (IPAPs) serve to diversify the economy beyond the mining sector.
They prioritise sectors that are medium to high value added and labour-intensive such as agro-processing, vehicles, textiles and green energy.
On top of promoting trade and attracting FDI, the IPAPs provide incentives and co-ordinate actions to strengthen skills and industrial and scientific capabilities.
These policies have enhanced co-operation and discussion among government ministries, the national development bank, private-sector stakeholders, civil society and universities.
Zimbabwe’s economy has suffered for long and it’s high time better policies are crafted for the development of the country.
Relaxing indigenisation laws on many sectors is a positive move towards restoring confidence among investors.
Kudzai Goremusandu is a business consultant based in Harare. He can be contacted on [email protected]. Patson Chapeyama is a young business growth expert and can be reached on patchapeyama@gmail.
