More private sector industrial policy input needed

| Friday October 22, 2010 00:00

Trade Law Centre for Southern Africa executive director, Trudi Hartzenberg, said recently that industrial policy was all about what government could do to influence company-level decision-making and attract industrial development.

South African Institute for International Affairs trade programme head, Catherine Grant, added that labour policy issues and network services must buttress industrial policy with a focus on horizontal issues, rather than trying to focus on sectoral policies.

The comments were made at the seventh Southern African forum on trade, hosted by the Institute for Global Dialogue (IGD), which sought to analyse industrial cooperation in Southern Africa and explore the opportunities and challenges.

It was accepted that one of the many reasons for Africa's disappointing performance in global and regional trade, was the continent's slow rate of upgrading, modernising and expanding its industrial base. Africa's main exports were still primary resources and minerals, while most manufactured goods were imported.

The IGD noted that there was pressure to advance a customs union in the Southern African Development Community (SADC), although it was felt that this would not address the structural requirements for economic integration and diversification. 'The SADC regional integration agenda thus requires a shift away from simple market liberalisation, towards developmental integration that combines trade integration with cross-border infrastructural development and industrial policy, and other sectoral policy cooperation to address real economy constraints,' added the IGD.

Botswana Institute for Development Policy Analysis representative, Roman Grynberg, asserted that there would be no SADC customs union, at least until the existing Southern African Customs Union (Sacu) sorted out its revenue-sharing arrangement.

Sacu consists of Botswana, Lesotho, Namibia, South Africa and Swaziland. The contentious revenue-sharing arrangement is currently under review as there are concerns that some of the smaller member States are too reliant on the income from the arrangement for national budgets.

South Africa has suggested that the money be put into a development fund, potentially to contribute to cross-border infrastructure projects and tackle non-tariff trade barriers.

Grynberg believed that the type of industrial development fund proposed was the only way to solve the issues with industrial and agricultural development, and to decrease donor dependence in the region.

Commenting on regional industrial policy, Grynberg stated that the draft SADC industrial policy, which has been released, was an 'anodyne consensus document', which was unlikely to solve any of the major problems.He stated that the issue of polarisation of member States within the SADC had to be properly discussed.

Zimconsult director, Dr Daniel Ndlela, argued that the key challenges facing Africa's industrial development were the same as evidenced in the last 40 to 50 years. These were the challenges of a lop-sided economy in terms of structure, size and patterns of production, consumption and trade, as well as the problem of sluggish growth, weak to poor manufacturing capabilities and declining market share in both regional and global markets.

A lack of vision integrating economies within the SADC, which involved coordinated macroeconomic policies and growth-oriented industrial and trade policies as a basis for a common market for goods and services, was also a problem. New and upgraded infrastructure and improved facilitation and services to ease transport and communication lines across African borders were also required.

Ndlela said that the procrastination in moving towards a unified labour market, where skilled personnel and workers could move easily, was another challenge that presented itself. (Engineeringnews)