Industry & Agriculture

The COMESA Industrial Policy (2015) and strategy (2017) are in line with the COMESA Treaty in its Article 99 on cooperation in industrial development, in order to achieve the following objectives:
• Promote self-sustained and balanced growth;
• Increase the availability of industrial goods and services for intra-Common Market;
• Improve the competitiveness of the industrial sector thereby enhancing the expansion of intra-regional trade in manufactures in order to achieve structural transformation of the economy that would foster the overall socio-economic development in Member States; and
• Develop industrialists that would acquire ownership and management of the industries.
The Strategy was developed based on the COMESA Industrial Policy which was adopted by the Council in 2015. It focuses on 9 key priority areas: Agro-processing, Energy, Textile and Garments, Leather and Leather Products, Mineral Beneficiation, Pharmaceuticals, Chemicals and Agro-Chemicals, Light Engineering and the Blue Economy. These focus areas have been identified based on their impact on the sustainable and inclusive economic growth for COMESA Member States.
The COMESA Industrial Strategy is also in line with the COMESA Medium Term Strategic Plan in which industrialization is one of the strategic pillars.
The proposed strategy combines the labor-intensive and human and natural resources-driven industrialization approaches aiming at transforming the region by converting rich resources into a powerful engine for economic transformation of the member states and poverty reduction.
The Industrialization Strategy is also underpinned by national industrialization policies and strategies and draws lessons from best regional and international practices. Therefore, the Vision is to have
“Globally competitive environmental-friendly, diversified industrial sector which is based on innovation and manufacturing as tools for transforming regional resources into sustainable wealth and prosperity for all”.
This will be achieved through the following Goal “to develop a vibrant and sustainable industrial sector that will ensure equitable benefits to all the people of COMESA Member States”.
The above goal will be achieved through promoting industrialization in key strategic sectors. This will require major structural transformation for inclusive and sustainable development. Structural transformation will be associated with the reallocation of resources, especially new investments, from low to higher productivity activities and sectors. The Strategy is informed by two models of industrialization, the natural resources-led and the human resources-led model or a combination of the two, depending of the country’s particularity.
Broad specific targets of the COMESA Industrialization Strategy (2015-2025) are the following:
• Diversifying the manufacturing base to reduce imports of value added agricultural and resource based commodities by at least 15% in 2025 from the current estimate of 7%;
• Increase in value addition activities as a percentage of GDP by at least 20% by 2025 from the current estimate of 9%;
• Increase intra-regional manufactured exports relative to total manufactured imports to the region to at least 25% by 2025 from the current 7%.

programmes

Enablers
The Strategy outlines eight enablers for its successful implementation. These enablers include:

(1) Infrastructure development: In most COMESA Member States there is lack of efficient and reliable transport, energy, water and ICT. These key enablers play a central role in lowering the cost doing business and contribute to industrial competitiveness.
(2) An enabling legal, regulatory and institutional business environment: for successful industrialization, member states should improve legal, regulatory and institutional frameworks in order to improve ease of doing business and attract FDI.
(3) Access to finance: The lack of adequate and affordable finance and technical resources needed by manufacturing sector affects industrialization at both national and regional levels. Consequently this impedes job creation, and inclusive and sustainable industrialization.
(4) Standardization, quality assurance and quality management systems: One of the major challenges that industries in Member States face regarding accessing markets for their manufactured products is poor adherence to systematic and internationally acceptable quality standards. Despite the tremendous progress achieved over the past years, in particular, in the areas of harmonisation of standards, some major challenges remain to enhance smooth trade and remove existing trade barriers in the COMESA FTA. The current Regional Quality Infrastructure in COMESA is, by and large, not commensurate with international best practices and hence does not fully meet the requirements espoused under the WTO Trade Agreements and by the major trading partners. It remains a challenge to implement the adopted standards (both international and regional) without a functional and acceptable quality infrastructure
(5) Establishment of Special Economic Zones: One of the instruments for successful industrialization, as seen in Asia, has been the development of SEZs. The main motivation for creation of SEZs is to attract FDI. Because of liberal policies related to taxation, trading, quotas, customs and labour regulations, enterprises located in SEZs become competitive, or they are supposed to be. With proper management and incentives, SEZs can be an important tool for industrialization.
(6) Linking Science, Technology and Innovation (STI) to Industrial Development: In most countries, industrialization and technological change are seen as two different elements in development process. This has led to dual narrative on industrial development and STI policies. Member States should consider that STI/Innovation policies are an integral complement to industrial policies/national industrial development strategies; and achieving sustainable industrialization calls for both frameworks to be coordinated very closely.
(7) Promoting the use of Diaspora resources: Diaspora funding is becoming important in development. This not only includes financial investments but also technical expertise. To promote diaspora involvement in the industrialization drive, there is a need to harness the knowledge, finance and entrepreneurial capacity of the Diaspora to enhance investment in industrial recording with the rest of the world means the region can benefit from import substitution initiatives, especially for raw materials needed by industries.
4. Implementation Modalities
The COMESA industrial strategy will be implemented through various stakeholders. These include the COMESA Secretariat; COMESA Institutions, Member States governments, private sector and development partners among others. Further, a task force comprising of seasoned industrialists, public policy makers, Development Partners among others will be formed to spearhead business linkages, joint ventures and partnerships among others for industrial development in the region.
The Strategy provides the recommendations and guidelines on how to achieve an increased production and productivity within the COMESA regional industrial sector. It also defines the industrial priorities based on the availability of resources within the COMESA Member States. The Strategy further provides greater clarity for COMESA Member States on the long term approach to supporting sustainable growth of the industrial sector.sector or related supporting sectors.
(8) Promoting local content and local sourcing: For successful industrialization of the region, there is a need for encouraging local sourcing of commodities. The negative trade balance that the region is still

 

our team

Mr. Thierry Mutombo- Director
Industry & Agriculture Division