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Prospects for SADC Regional Integration through Industrialization and the Role of China

Prospects for SADC Regional Integration through Industrialization and the Role of China

Prospects for SADC Regional Integration through Industrialization and the Role of China
May 13
16:34 2017

By Ms. Bernadette Deka-PMRC Executive Director

Dear Friends and Colleagues,

From 19th to 21st April 2017, PMRC was privileged to participate in the research policy seminar discussing Prospects for SADC Regional Integration through Industrialization and the Role of China. The policy seminar was hosted by The University of Johannesburg – Confucius Institute (UJCI), and the United Nations Economic Commission for Africa (UNECA), Southern Africa Office, in collaboration with Oxfam International’s Africa-China Dialogue Platform (ACDP), Addis Ababa, Ethiopia.  The Policy Monitoring and Research Centre (PMRC) was represented by Mr. Salim Kaunda (Head of Research and Analysis)

The main objective of the research seminar was to examine China-SADC relationship in the context of SADC’s new industrialization policy and its Revised Regional Indicative Strategic Development Plan (RISDP). The seminar reflected on the background and trajectory of the relationship between China and SADC and its member states in promoting industrialization in the region, the trade and investment exchanges and cooperation in infrastructure development and implications for industrialization in the region. The seminar also explored how China can effectively support and promote industrialization in Southern Africa. China had committed itself to this at the 2015 Forum for China – Africa Cooperation Dialogue Conference (FOCAC), held in South Africa and the G20 Summit, held in China in September 2016.

General observations 

  1. Southern Africa faces particular challenges in its industrialization efforts, which are  associated with the nature of the current phase of industrialization in which we find ourselves, that is, the fact that machines are poised to replace human beings in the production process. How does the continent deal with this challenge in its industrialization drive, particularly in terms of its impact on employment and revenue generation from taxes?
  2. The SADC region like the rest of the continent cannot afford to industrialize in isolation from the rest of the world, given that the knowledge and expertise required for this endeavor is dispersed around the world. History suggests that previous industrialization efforts have relied on ideas generated in countries other than the industrializing context. This is where partnership with China and other nations becomes paramount. 
  3. Industrialization is central to the economic transformation and the development of Southern African countries, in which steady progress has been made. Countries are at different levels of industrialization, of which South Africa is the most advanced in the region and the continent.
  4. Southern Africa has historically relied on the primary sector for its economic growth, leaving the economic performance of the region at the mercy of environmental factors and fluctuations in the global commodity prices. This makes industrialization all the more imperative.
  5. The SADC Industrialization Strategy and Roadmap (2015) and the RISDP provide good frameworks for the accelerated industrialization of Southern Africa, but implementation is the key issue.

Selected Recommendations 

  1. Member states in the SADC region should develop national industrialization policies guided by the regional industrialization framework, as this would promote a coordinated approach towards regional industrialization.  
  2. Member states in the SADC region should develop harmonized policies, legal and regulatory frameworks to manage the operations of Chinese companies and ensure that the companies comply. In other words, there should be a regional China policy for Southern Africa or the entire continent. 
  3. For sustainable social – economic development, Chinese investment in Africa must contribute to structural transformation and the deepening of the linkage of the resources sector to other economic sectors through beneficiation and value addition. 
  4. Member states and SADC Secretariat should design mechanisms for the collection of quality data and its timely dissemination to facilitate evidence-based analysis and tracking of progress against set targets.
  5. China’s role in the industrialization efforts of SADC should go beyond material and technical assistance. Africa should also learn from China’s own industrialization efforts. Moreover, China’s support for SADC’s industrialization should be based on SADC’s industrialization strategy.
  6. There is an urgent need to address the region’s structure of trade with China, and move away from the “mineral for infrastructure approach” to economic development cooperation. One way to do this is to develop regional value chain that strengthens the competitiveness of the region.
  7. Value addition linkages for industrialization should prioritise those minerals that are critical for the region’s development, e.g minerals that help the region to produce steel, fertilizer, and energy. 

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