Africa's sustainable growth hinges on industrialization

A ministerial conference marked the peak of the African Development Week, drawing high-level government officials from several African countries to Addis Ababa, Ethiopia.

The conference, jointly hosted by the African Union (AU) and the United Nations Economic Commission of Africa (UNECA) was officially opened by Prime Minister of Ethiopia Hailemariam Desalegn.

Running under the theme Towards an Integrated and Coherent Approach to Implementation, Monitoring and Evaluation of Agenda 2063 and Sustainable Development Goals (SDGs), the annual forum drew ministers of finance, planning and economic development and policy experts to discuss how Africa can domesticate international and continental agreements and bring the continent closer to achieving global goals.

In his address, the prime minister said industrialization is Africa's insulation against shocks that are threatening to derail progress towards economic transformation.

"The high dependency on commodity exports exposes many of our economies to vulnerabilities extending from prices and demand volatilities. In this context, pursuing industrialization and transformative structural agenda is imperative to strengthening the fundamental of our respective economies," he said.

China has invested heavily in Ethiopia with estimated figures from Ethiopia Investment Agency showing 415 Chinese companies may have taken licenses between August 1998 and October 2012. China is the leading trading partner of Ethiopia with direct investments estimated to have reached $58.5 million in 2010. A World Bank survey shows most Chinese factories are from three provinces, Zhejiang, Liaoning and Fujian.

The African country is the fastest growing nation in the continent with IMF projecting growth levels at 8.7 percent and 8 percent in 2015 and 2016 respectively. The World Bank estimate puts the growth rate at 9.5 percent and 10.5 percent over the same period.

The government said it has managed to achieve most of the Millennium Development Goals at a time majority of Sub-Saharan countries fell short of their targets.

Desalegn said that the only way the continent can realize Agenda 2063, the outcome of the 3rd International Conference for Financing Development, the 2030 Agenda for SDGs and the outcomes of the 21st Conference of the Parties agreement in Paris is by collectively fulfilling their commitments.

The United Nations Under Secretary-General of the ECA Carlos Lopes addressed the growing apprehension that African countries may default on their expanding sovereign debts calling it unfounded. Lopes instead called for flexibility in placing debt ceilings and assessing debt to ensure African countries are not over-constrained or unduly deprived.

"The issue of debt sustainability will essentially depend on a comprehensive treatment of all components of debt in a debt restructuring, and the provision of clear mechanism to engage all stakeholders to build up consensus on how to close the gaps in financial architecture."

He said Africa has positive narratives that place it in a strong path of growth despite the global recession.

"The volatility of most commodities excluding oil has been high in 2015, but, contrary to general belief, not far above historical trends. Uranium, gold, coffee, cocoa or orange juice exported from Africa are experiencing record prices," said Lopes.

Also in attendance was the AU chairperson Nkosazana Dlamini Zuma, Prime Minister of the Democratic Republic of Congo Augustin Matata Ponyo Mapon and Vice-President of Namibia Nickey Iyambo among other dignitaries.

The forum is expected to conclude on Tuesday with the adoption of the draft ministerial statement.