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Yaoundé, July 10, 2019 (ECA) – The United Nations Economic Commission for Africa (ECA) has once again urged the leaders of the Central African subregion, particularly those in CEMAC member states, to continue to work in Africa. The need for economic diversification and trade-related industrialization as pillars of their sustainable development trajectory, while making the most of the opportunities offered by digital transformation and regional integration – a case reinforced by the advent of the African Continental Free Trade Area (AfCFTA).
The Director of the ECA Subregional Office for Central Africa, Mr. Antonio Pedro, underlined these points during a consultation on the acceleration of the physical and commercial integration in the CEMAC zone, convened recently in Douala , in Cameroon, by Professor Daniel Ona Ondo, President of the Commission. CEMAC Commission.
Gilbert Ondongo, Minister Delegate for the Economy, Industry and State Projects of Congo, badisted by the President of the BDEAC, the Governor of the BEAC, the Ministers of Finance and the Ministry of Finance. 39, other representatives of all the CEMAC member States, as well as by the development partners, the meeting focused on the identification of realistic integration projects for the second phase of the Economic Program. CEMAC (PER), through which the countries of the sub-region expect to reach the middle-income level, to be better integrated and secure as well as to improve governance standards and ratings. of human development.
Align the CEMAC ROP with the 2030, 2063 and national programs
Justifiable, the majority of PER projects under study focused on infrastructure, including the construction of roads, bridges, railways, fiber optic lines, hydroelectric dams, transmission lines and ports. dry – clear evidence of the need to address infrastructure issues. bottlenecks that make Central Africa a very expensive and uncompetitive investment destination, when compared to other African subregions.
At the meeting, Mr Pedro de la ECA acknowledged the importance of the PER for infrastructure development, while stating that it was equally important to include projects aimed at promoting diversification. economic and industrialization in the regional program, if the region was to break the vicious circle. the ups and downs that characterize most Central African economies.
"We need a second generation PER with economic diversification and industrialization as priority pillars," he said.
"To foster the emergence of regional value chains and improve the compatibility of local economies, we want to see national development plans and strategies fully aligned with the new PER," he said.
Pedro explained how to align the RDP with the objectives of the 2030 Agenda of the United Nations and the 2063 Agenda of the African Union, and identified opportunities that Central Africa could exploit. to play a leading role in the key and most strategic transitions and transformations for the achievement of the SDGs and Agenda 2063 in Africa and around the world.
To this end, he presented the six key transformations to achieve the United Nations Sustainable Development Goals (SDGs), as listed by the Sustainable Development Solutions Network (SDSN), namely i) l & # 39; Education, inclusion, employment and growth; ii) health and well-being; (iii) clean energy and industry; (iv) sustainable food, land and ocean use; V) smart cities and transport systems; and VI) digital technologies and electronic governance; and compared them to sectors in which Central Africa has comparative advantages.
Citing the IMF's badessment that Least Developed Countries (LDCs) would need about US $ 500 billion to meet the Sustainable Development Goals, he stressed that, to finance the goals, governments of the region are expected to improve macroeconomic management, strengthen domestic resource mobilization tax administration, increase the efficiency of spending, fight corruption and improve the business environment for private sector development .
"Official development badistance (ODA) from governments and abroad alone is not enough to fill the financing gap," he said.
"The private sector has an important role to play and, most importantly, given the current macroeconomic instability in Central Africa, we need to invest in the sectors that would earn the most for every dollar invested," he said. he added.
Changing paradigms towards greater horizontal and vertical economic diversification
This led the Director of the ECA Subregional Office for Central Africa to advocate again for economic diversification and trade-induced industrialization as the most viable to end the vicious cycle of economic growth faltering, due to shocks resulting in excessive reliance on export of raw / unprocessed products.
Central Africa can not make significant progress in national and intraregional projects that are currently experiencing low economic diversification, he said, noting that the share of manufacturing value added in marketable products in the subregion was at 18% in the best case (the Democratic Republic of Congo). Congo) and less than 3% in the most serious cases (Chad and Gabon).
He noted that in Central Africa, 75% of the export earnings of five countries depended on one or two products. In Angola, Chad and Congo Brazzaville, only one product, oil, accounts for more than 75% of exports.
The advent of the African Continental Free Trade Area (AfCFTA) calls for a paradigm shift towards greater horizontal and vertical diversification of export products. "AfCFTA has tremendous potential to contribute to the diversification of our economies and to the increased sophistication of our export products, as intra-African trade is already more sophisticated than the trade between the US and the US. Africa and the rest of the world, "continued Pedro. "But to sell in Africa or elsewhere, you have to be productive and competitive."
He asked why food products represented respectively 27% and 29% of total imports from Gabon and Equatorial Guinea, which have sufficient arable land. He considered food production, a fruit at hand from which production and valorization should begin in the CEMAC zone.
"Why can not we produce locally the fertilizers and other chemicals needed for agricultural production, especially when we have comparative advantages in this sector?", He questioned. He recalled, for example, that the in-situ value of Congo's potash resources (used for fertilizer production) exceeded $ 2 trillion and that the global potash market would be worth about $ 50 billion a year. here 2050.
Pedro, from ECA, outlined the potential of the subregion in several other niches, including the production of: construction equipment and housing as a result of rapid urbanization; pharmaceuticals, given the enormous medicinal resources of the forests of the subregion; and the manufacture of electric cars and lithium-ion batteries thanks to the unrivaled capacity of Congo's cobalt production (60% of the global cobalt supply).
Productivity in all these sectors, he added, would be greatly improved if the digital economy, which currently accounts for 15.5% of global GDP, is exploited, and is expected to reach 25% of GDP. here less than a decade.
Financing programs 2030, 2063: need for projects that can be financed, to tackle binding constraints
Pedro argued that for CEMAC member states to effectively implement the 2030 and 2063 programs, as well as their integrated development goals, they face constraining constraints, including funding hurdles. corruption, infrastructure, energy and the necessary skilled labor. . He urged Central Africa to double its share of intraregional trade (less than 3% currently) over the next five years. "To measure economic performance, the CEMAC regional economic program needs clear indicators and objectives," he said.
"The sub-region should develop its portfolio of projects that can be funded by adequate growth diagnostic studies, better value chain badysis, product space badysis, competitiveness profile and project design, "he noted.
Such an approach was also advocated by the Islamic Development Bank (ISD) which informed the meeting of its current strategy based on global value chains, value-added, development of competitive sectors and improvement of the financing capacity of private finance mobilization projects.
The African Development Bank, also present at the meeting, presented its strategy of regional integration of Central Africa for the period 2019-2025, which aims to stimulate economic diversification and structural transformation by increasing the intraregional trade in the subregion. Among other objectives, the Bank will build the capacity of the regional economic communities to manage and implement regional projects.
To conclude, Pedro advised the leaders of the sub-region to consider including monitoring and monitoring of the status of the implementation of the Douala Consensus (a call for stakeholders to economic diversification in the subregion launched at the 2017 ECA statutory subregional conference). Economic and Financial Reform Program of CEMAC (PREF – CEMAC).
The recommendations proposed by ECA and other participants were adopted by the meeting as recorded by the Council. Final release signed by the president of CEMAC.
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