Invest in Human and Financial Capital to drive sustainable industrialization, Southern African Development Community (SADC) urged

Africa Urged to Boost Investment in Human and Financial Capital for Sustainable Industrialization

Africa should boost investment in human and financial capital to accelerate its sustainable industrialization and economic growth, Antonio Pedro, acting Executive Secretary of the Economic Commission for Africa said at the 43th Southern African Development Community (SADC) Ordinary Summit of the Heads of State and Government in Luanda, Angola.

The Importance of Human and Financial Capital

The 43rd Session, which opened this week, had the theme, “Human and Financial Capital: The Key Drivers for Sustainable Industrialisation in the SADC Region.”

Noting that human and financial capital were key drivers for sustainable industrialization, Mr. Pedro said much of Africa was off track to meeting the Sustainable Development Goals (SDGs) despite the region having endowments to rescue the SDGs and achieve Agenda 2063.

Aligning Education and Investing in Science and Technology

African countries should align their education systems with market and societal needs, Mr. Pedro urged. Equally, he said governments must invest in science, technology, and innovation to move away from the resource extractivism model that characterizes most of Africa’s mineral-rich countries and escalate value chains to avoid the middle-income trap.

The impact of the global shocks of conflict, climate, food, and energy crises as well as heightened tensions call for a strong African position within the global geopolitical economy, he said.

Trade Diversification as a Solution

“For countries in the SADC region, the Russian/Ukraine conflict laid bare the fragility of the diversification strategies that do not address the structural issues compounding our growth model and the germane issues of poverty and inequality,” said Mr. Pedro, lamenting that commodity dependence has left many African economies at the mercy of global commodity price fluctuations, boom and bust cycles, leading to macroeconomic instability.

Calling for African countries to “break this vicious cycle” of commodity dependence, Mr. Pedro highlighted trade diversification as the solution to reducing the region’s vulnerability to global market turbulence and geopolitics.

A Paradigm Shift for Industrialization

The SADC region needs a fit-for-purpose industrialization and economic diversification pathway to rescue the SDGs and achieve Agenda 2063, the acting Executive Secretary emphasized, saying:

“Business as usual will not deliver the SDGs and Agenda 2063 nor the future we want. We need a paradigm shift in our approach to accelerate the pace of industrialization, achieve an impactful structural transformation, and meet our goals.”

Multi-sectoral Approaches Boost Industrialization

Mr. Pedro challenged African leaders to establish an ecosystem for transformational change and leadership that brings together the government, the private sector, and other stakeholders in quality dialogues and co-creation of home-grown solutions.

“The time we devote to creating an enabling environment for Foreign Direct Investment should equally be spared into creating an adequate environment for domestic investors, big and small, because the emergence of a strong and competitive small and medium-sized enterprise sector will create the jobs we need for the youth,” said Mr. Pedro, calling for industrial policies to be at the center of development policies.

In addition, Mr. Pedro said African countries must move beyond aid and broaden finance to enhance productive capabilities by mobilizing more domestic resources through pension funds which are attracted to bankable projects.

“Greening industrialization is possible in SADC and it would be a very smart course of action because soon it will be increasingly difficult for us to export our value-added goods to jurisdictions that are introducing carbon borders,” said Mr. Pedro.

Noting that carbon credit markets can support industrialization in Africa, Mr. Pedro said the Democratic Republic of Congo could lead the region’s efforts in monetizing the ecological services of natural capital to finance structural projects.

At US$120 a ton of CO2 sequestrated, Africa can generate US$82 billion a year, more than what the continent receives from Overseas Development Assistance. In addition, the development of the DRC-Zambia transboundary battery and electric value chain would benefit the SADC region to produce batteries locally and accelerate the deployment of solar and wind energy across Africa.

Meeting with Angolan Minister of Industry and Commerce

While in Angola, Mr. Pedro met with Angolan Minister of Industry and Commerce, Rui Miguêns de Oliveira and discussed the need for the country to diversify its economy by not only moving up the value chain but expanding into other sectors such as agriculture and agribusiness.

Mr. Pedro underscored the importance of mobilizing financial resources from diverse sources, including establishing a special purpose vehicle to enable Angola to tap dormant pension funds for development projects as well as developing Angola’s carbon credit market.

Noting that strengthening the national statistics system was critical for Angola to mainstream natural capital in its national accounting, Mr. Pedro said such accounting will ensure that the country’s wealth is adequately measured and could improve its ranking beyond the GDP positioning.

Distributed by APO Group on behalf of United Nations Economic Commission for Africa (ECA).

This Press Release has been issued by APO. The content is not monitored by the editorial team of African Business and not of the content has been checked or validated by our editorial teams, proofreaders, or fact-checkers. The issuer is solely responsible for the content of this announcement.

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 4: Quality Education
• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action
• SDG 17: Partnerships for the Goals

The article discusses the need for investment in human and financial capital to accelerate sustainable industrialization and economic growth in Africa. It also emphasizes the importance of aligning education systems with market needs, investing in science and technology, diversifying trade, and greening industrialization. These issues are directly connected to the SDGs mentioned above.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 4.4: By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs, and entrepreneurship.
2. Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation.
3. Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product.
4. Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
5. Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
6. Target 17.16: Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology, and financial resources.

The article highlights the need to increase relevant skills for employment, promote industrialization, diversify economies, manage natural resources sustainably, integrate climate change measures, and enhance global partnerships. These targets align with the SDGs mentioned above.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 4.4.1: Proportion of youth and adults with information and communications technology (ICT) skills, by type of skill.
• Indicator 8.2.1: Annual growth rate of real GDP per employed person.
• Indicator 9.2.1: Manufacturing value added as a proportion of GDP and per capita.
• Indicator 12.2.1: Material footprint, material footprint per capita, and material footprint per GDP.
• Indicator 13.2.1: Number of countries that have communicated the establishment or operationalization of an integrated policy/strategy/plan that addresses climate change and disaster risk reduction.
• Indicator 17.16.1: Number of countries reporting progress in multi-stakeholder development effectiveness monitoring frameworks that support the achievement of the sustainable development goals.

The article implies the importance of measuring indicators such as ICT skills, GDP growth per employed person, manufacturing value added, material footprint, climate change policy/strategy/plan establishment, and progress in multi-stakeholder development effectiveness monitoring frameworks.

4. Table: SDGs, Targets, and Indicators

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Source: african.business

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