AfDB calls for faster industrialization of African economies

The African Development Bank has called the continent to accelerate industrialisation for the transformation of its economies. The call aimed at promoting smart industrial policies and mobilising infrastructure development funding for Africa.
The AfDB counts industrialising Africa as one High-5 key strategic aims, crucial for the trans- formation of African economies.

“Industrialisation, where we add value to what we competitively produce and then export, and also trade among ourselves on the back of the AfCFTA within a market of 1.3 billion people, should be prioritised and delivered,” said Solomon

Africa is on course to add $180 billion or 5.2 per cent of aggregate GDP by 2025, thanks to the rap- id growth of its internet economy. The report by IFC and Google shows that in 2012, the continent’s internet economy (iGDP) was estimated at just $30 billion, or 1.1 per cent of its GDP.

This year iGDP will contribute $115 billion, or 4.5 per cent of a $2.554 trillion GDP, says Accenture. In the US, the internet economy contributed around 9 per cent of GDP in 2018. Key to growing an internet economy, which includes everything from banks and fintechs to agritech, e-health, and venture capital, will be growing the developer talent that builds the products and engines on which it run.

In 2019, the French-born chief executive of Jumia, the Pan-African e-commerce company, sparked outrage in African tech circles when he suggested there were insufficient developers based in Africa to service his company’s needs. “Women currently make up 21 per cent of developers in African nations, compared with just 15 per cent of junior developers in the US.

” The report says there are nearly 700,000 professional developers across Africa with more than half in five African markets: Egypt, Kenya, Morocco, Nigeria, and South Africa. That number is still relatively small against Africa’s 1.3 billion people—California alone has 630,000 developers while Latin America has 2.2 million.

But Africa’s developer talent is younger than those in more advanced economies and the overall numbers on the continent are growing faster. Just a third of them receive their training through universities, in- stead more than half are either self-taught or pay for online school programmes, speaking to the de- sire and broad ambition to acquire skills for future employment and entrepreneurship in countries with few existing formal jobs, but also a shortage of digital skills.

The report notes that it’s easy to see why young African undergraduates or recent graduates might choose to be self-taught or pay out of pocket for additional skills. The report shares, for example, computer science courses in Kenyan universities still predominately teach C++, “even though Java and Scala are the program- ming languages in the greatest demand in the marketplace.”

To date much of the developer talent falls into the “junior develop- er” category which presents its own challenges as Lagos-based Andela found when it had to recruit more experienced talent to supply cli- ents in the US and other markets.

In African countries with smaller and more nascent developer populations, 43 per cent of developers have only one to three years of experience, compared with 22 per cent in the US.” Quaynor, the Bank’s Vice Presi- dent, Private Sector, Infrastructure & Industrialisation during the Africa Industrialisation Day.

Quaynor stressed that the novel COVID-19 pandemic had sharpened the need to accelerate industrialisation and urged a greater role for the private sector, including as a partner to the public sector.
He added that resilience is key, and that means no matter the external shocks in the future, Africa should rebuild so that its people, particularly youth and women who head the households, have jobs and better incomes,” he said.

The Bank continues to support operationalization of the African Continental Free Trade Area (AfCFTA).
In August 2019, the institution extended a $4.8 million grant to support the establishment in Ghana of the AfCFTA Secretariat.

The Bank is working with African countries that are developing strategies for implementation of the AfCFTA, helping them to build capacity and leverage opportunities provided by freer trade.
according to the Bank’s 2020 Annual Development Effectiveness Review (ADER), when businesses can trade across borders, then industry can expand, economies can diversify, and countries can move up the value chain.

The report suggests that the Bank’s investments in 2019 benefited one million people. Micro, small and medium enterprises (MSMEs) that benefited from Bank projects trebled their turnover to $1 billion. Several projects recently approved by the Bank are expected to help regional member countries exploit opportunities, including the construction and operation of a submarine internet cable in Seychelles and a project to expand access to finance for small and medium-sized enterprises in West Africa, the report noted.

The AfDB is also promoting development of economic zones that bring together an enabling business environment, backbone integrated infrastructure and transport near to agricultural production hubs. “Agro-Industrial Processing Zones aim to train young people in rural areas with the needed skills and attract companies, espcially SMEs,” said Atsuko Toda, the Bank’s Director, Agricultural Finance and Rural Development.

The pandemic has also spurred opportunities for Africa to strengthen local manufacturing capabilities for basic and essential medicines, Personal Protective Equipment and other medical equipment.
“The Bank is undertaking a ground-breaking study to develop a plan for this, which will be ready before the end of the year. The plan will highlight opportunities, challenges, policy reforms required, financing windows and strategic partnerships to be forged to make this happen,” said Abdu Mukhtar, Director of Industrial and Trade Development at the African Development Bank.