06/11/2021 | Press release | Distributed by Public on 06/11/2021 10:32
Yaounde, 11 June 2021 (ECA) - A new comprehensive, segmented and dynamic framework to inform the formulation of sub-regional and national industrialization and economic diversification masterplans (PDIDE, in French) has taken root in Central Africa, with the aim of turning the zone into a poly-hub for green growth and net-zero industrialization in multiple sectors such as agro-industry, battery-electric vehicles-renewable-energy, NPK fertilizers, petrochemicals, iron and steel, and livestock-leather, to name a few.
Engineered by the UN Economic Commission for Africa (ECA) on the basis of existing plans by the CEMAC and ECCAS commissions and its own analysis, growth diagnostic studies and forecasts, the PDIDE Framework pinpoints huge opportunities for developing several high-value products on the strength of Central Africa's endowments on natural capital including renewable energy, and anchored on the development of natural and human capital, the digital economy and regional economic zones and clusters.
The Framework, was reviewed and validated recently by representatives of the CEMAC Commission, the Coordinator of the Technical Secretariat of the Steering Committee for the Rationalization of the Regional Economic Communities of Central Africa (COPIL / CER-AC) and officials/experts from Central African countries.
Noting that Central Africa's abundant natural resources have not yet helped the sub-region to create decent and sufficient jobs, especially within the productive sectors of modern industry and services due to deficits in economic diversification, the Framework builds a strong case for the subregion to use its natural capital (such as its vast forests and associated ecological services)to widen fiscal space and mobilize innovative financing (e.g. green and blue bonds) to accelerate the transition to a net-zero carbon neutral industrial era. This should also make the region a preferred global destination for green investments.
Highly demanded minerals such as cobalt, copper, lithium and manganese are found in abundance in the subregion and they should be used to produce batteries and electric vehicles. The battery cells produced in the region would also help store energy captured from wind and solar devices expanding energy access and the realization of SDG 7. By 2025, the battery and electric vehicle value chain alone will become a US$8.8 trillion industry from which the sub-region should cut a comfortable slice.
Whilst the Democratic Republic of the Congo (DRC) is the hub of battery minerals, the high solar irradiation and wind energy dispositions of Chad and North and Far North regions of Cameroon make such a renewable energy value chain easy to develop.
Deploying these energy resources into agro-industry, for instance meat processing, cold chain and storage, and packaging for export, will greatly benefit a country such as Chad with its 113.6 million heads of cattle, most of which are, at the moment, tediously exported on foot to neighboring countries such as Nigeria. Likewise, timber-producing countries such as Cameroon, the Central African Republic and Gabon could benefit from a guaranteed supply of renewable energy to move beyond log exportation to at least the first log transformation (hardboard, sawn timber, paper, cardboard, bunks, bathrobes, veneer) and the second log transformation (rails, construction, wooden frameworks, furnishings, shipbuilding, packaging, containers). These are some of the tenets of the Framework.
'Our proposition within this Framework is not just to show where potential is but to elicit action straightaway, given the abundance of resources which should enable Central Africa to leapfrog the carbon-intense stages of industrialization, which characterized the First Industrial Revolution, and take-off with green industrialization,' remarked Antonio Pedro who heads ECA's Sub-regional Office for Central Africa.
'Central Africa is no doubt the home of the world's coveted minerals not only for the battery and electric vehicle value chain but also for electronic equipment.
'If we do not act now on some of these strategic minerals, technology may evolve in the developed world to the extent that our resources become stranded assets in which no one will pay further attention,' Pedro added as he urged Central African countries to improve their, governance, rule-of-law and doing business credential with the view to making the subregion more attractive to investors. He underscored the importance of public-private-partnerships and the need to foster the emergence of competitive small and medium-scale enterprises, as they are the ones who create the much-needed jobs for the youth.
Participants attending the Framework's review exercise, agreed that dormant capital residing with Pension Funds, crowd financing, and the establishment of Special Purpose Vehicles (SPVs) such as infrastructure bonds industrialization bonds and crowdsourcing could be employed to expand the sources of finance for industrial development and economic diversification projects in Central Africa.
The reviewers also noted that it was high time for net-worthy individuals from Central Africa and the rest of the continent to invest their fortunes in the sub-region's economic diversification.
CEMAC's Commissioner in charge of the Department of Infrastructure and Sustainable Development, Shey Jones Yembe, said ECA's technical assistance was 'invaluable' and added that the present Framework will help the subregion to improve its industrial productivity, scale-up cross-border trade, expand and diversify the sources of economic growth, increase job creation, and raise the competitiveness of local companies, to get Central Africa out of 'the abyss of poverty.'
The Coordinator of the Technical Secretariat of COPIL/CER-AC, Patrice Libon Badjang, said the Framework to support PDIDEs in Central Africa was in synchrony with the process of rationalizing the regional economic communities (notably CEMAC and ECCAS). He noted that the PDIDE Framework was useful for advancing other projects in progress, notably the validation of the preliminary draft instruments of the planned unique Regional Economic Community of the subregion.
Antonio Pedro declared that in line with the PDIDE Framework, several Central African member States were already working with ECA to implement industrial development and economic diversification projects, citing the example of a project to develop the Kribi-Edea-Douala (KED) Growth Triangle in Cameroon as a Special Economic Zone for the development of the timber and pharmaceutical industry, and another one to integrate natural capital accounting into national accounts in Gabon, as a means to mobilizing innovative financing for green growth in the country. .
Observations made during the review exercise will be incorporated into the final version of the Framework. The latter will be made available to all regional economic communities and governments for their appropriation and incorporation into their PDIDE plans as part of a collective and integrated effort to implement the 2021-2030 Decade of Economic Diversification in Central Africa.
The validation of the Framework for Industrialization and Economic Diversification Masterplans in Central Africa is a clear display of the sub-region's commitment to the Douala Consensus on Economic Diversification, adopted in September 2017 during the 33rd session of ECA's Intergovernmental Committee of Experts and Senior Officials (ICE) on the theme 'Made in Central Africa: From a Vicious to a Virtuous Cycle'.
Abel Akara Ticha - Communication Officer
United Nations Economic Commission for Africa
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E-mail: [email protected]