Africa’s sustainable industrialization and diversification in the digital era and in the context of COVID-19

Africa’s sustainable industrialization and diversification in the digital era and in the context of COVID-19

Addis Ababa, 21 March 2021 – The United Nations Industrial Development Organization (UNIDO) has presented its Industrial Development Report (IDR) 2020: Industrializing in the digital age at a side event of the UN Economic Commission for Africa Conference of African Ministers of Finance, Planning, and Economic Development. The event provided the opportunity to discuss and reflect on the challenges and opportunities the COVID-19 pandemic presents for African countries in adopting advanced digital technologies, and in charting the future course of industrialization.

Opening the event, LI Yong, UNIDO Director Generalasserted that the world economy is facing enormous pressure, and that nearly all industrial sectors are affected. He also stressed, however, that “despite the challenges, the ongoing COVID-19 pandemic also presents new opportunities and has accelerated the uptake of digital technologies across diverse sectors”.

In his presentation, Nobuya Haraguchi, Chief of UNIDO’s Research and Industrial Policy Advice Division, pointed out that the emergence and diffusion of advanced digital production (ADP) technologies of the Fourth Industrial Revolution is radically altering manufacturing production, increasingly blurring the boundaries between physical and digital production systems. Advances in robotics, artificial intelligence, additive manufacturing and data analytics generate significant opportunities to accelerate innovation and increase the value-added content of production in manufacturing industries.

Ahmed Kamaly, Egypt’s Deputy Minister of Planning and Economic Development, added that under the right conditions, the adoption of ADP technologies can promote inclusive and sustainable industrial development and the achievement of the Sustainable Development Goals. He said, “Similar to other countries, we have seen the COVID-19 pandemic accelerate the uptake of digital solutions in Egypt. He continued, “Egypt has put in place the adequate industrial policy measures and enablers to accelerate its digitalization agenda in line with Egypt Vision 2030.”

Internet connectivity and access to stable and affordable electricity are among the preconditions for African countries to industrialize in the digital age. Célestin Monga of Harvard University emphasized that “policymakers of African countries should promote the strategic selection of competitive industries based on their comparative advantages, such as in labour-intensive and export-oriented light industries, to achieve inclusive and sustainable industrial development,” and asked, “How did Asian countries advance their manufacturing between the 1950s and 90s? This is a highly relevant experience for African countries.”

There is widespread concern that ADP technologies could trigger a process of backshoring from labour-intensive economies. The African Continental Free Trade Area (AfCFTA) will open up new opportunities for regional trade and economic integration once it has been fully implemented.

Professor Kunal Sen, Director of the United Nations University World Institute for Development Economics Research (UNU WIDER, said, “The pandemic has affected the tourism sector and international trade. Our views are that manufacturing development in Africa is still largely driven by the domestic market and small enterprises, therefore, the impact of the pandemic on African manufacturing remains to be seen.,

Phyllis Wakiaga, CEO of the Kenya Association of Manufacturers, shared her observations on sub-Saharan Africa’s digitalization process, claiming that only a handful of firms are fully adopting ADP technologies. The weak digital infrastructure and capabilities pose the biggest challenge for Africa’s industrialization in the digital era. During these currently extraordinary times, African countries must not only focus on economic recovery in a post-pandemic world, but must also build a resilient and sustainable industrial sector for the future.

Alejandro Lavopa, Research and Industrial Policy Officer at UNIDO, concluded that the preconditions and comparative advantages of African countries will continue to play a key role in shaping Africa’s industrialization process in the digital age as well as in the context of recovery from the COVID-19 pandemic. “The importance of aligning efforts to achieve a resilient industrial development will be at the core of the next flagship report of UNIDO, the Industrial Development Report 2022, which will focus on the impact of the pandemic on the future of industrialization.”

The UNIDO Industrial Development Report (IDR) series is an established source of reference on industrial development. The IDR 2020 is available here.

Watch a recording of the discussion here

For further information, contact:

Nobuya Haraguchi

Chief, UNIDO Research and Industrial Policy Advice Division

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