Wednesday, December 8, 2021

At the apex of developed blue and green economies, Africa must rise

A number of studies, carried out by renowned institutions have revealed the need for the development of the blue and green economies as critical requisites for Africa’s structural transformation geared towards creation of jobs, poverty reduction and economic with potential to generally improve the standards of living for the African people.

Two acclaimed publications, Economic Report on Africa 2016 and another by the United Nations Economic Commission for Africa (UNECA) of 2018 titled “Blue Economy, Inclusive Industrialization and Economic Development in Southern Africa” converge on the understanding that “structural transformation in African economies remains the highest priority, and industrialization is the top strategy for achieving it in practice”.

The Economic Report on Africa reckons that the big opportunity for Africa as a latecomer to industrialization is in adopting alternative economic pathways to industrialization.

This requires governments to take on board the drivers, challenges, and trade-offs in pushing for a greening of industrialization – and to build them into the vision and route-map for action.

The report also reckons that Africa’s growth has been characterized by heavy reliance on natural resources and low productivity across most sectors. It has been accompanied by high energy and material intensities, as well as waster generation. “These resources drive the resource scarcity and contribute to the high production costs that undermine the global competitiveness of Africa’s industrial sector”, states the economic report.

According to the report, “greening industrialization is an opportunity for Africa to achieve the type of structural transformation that yields sustainable and inclusive growth, creating jobs while safeguarding the productivity of natural resource assets”, and fortunately “there is now a growing commitment among African countries to pursue inclusive green development. A collective commitment from across the African Union would strengthen the speed and effectiveness of such a strategic shift”.

It is also recognized by the report that governments are central in “mapping out the pathway to green industrialization”. Long-term, consistent, and clear directions are required of policy makers to provide the institutional design and credible incentives at the heart of this structural transformation.

“Such a shift in economic strategy requires not a marginal tweaking of current policy tools, but a step-change in direction. In addition to adoption of effective inclusive green economy policies and strategies, greening industrialization will need relevant measures to create a policy environment characterized by good governance and institutions, available financial resources and technologies, and high quality human capacities. But this is not a task for government. Indeed, it will be achieved only by a partnership between government, business, civil society, producer groups, neighbourhood organizations, municipal government, researchers and technical experts”, the report submits.  

According to the report, “greening industrialization provides the impetus for turning current supply chains linking natural resources to markets, into value chains that diversify Africa’s economies and ensure greater value added”.

In an era of growing scarcity, resource-rich Africa must shift away from being a marginal supplier of raw of commodities, to harness the full potential of natural resources by diversification into greater value addition, through processing and marketing. The Africa Mining Vision offers a good example for making this step-change.

The report further notes that the challenge facing African leaders is top transform their patterns of production, and to build system-wide infrastructure in order to ensure secure supplies of water, food and energy. Green and inclusive industrialization provides a pathway to attain such goals.

And since most African countries share common environmental challenges, greening Africa’s development would promote regional integration, cooperation and the growth of continent-wide innovation capabilities, putting Africa’s development on a more robust, technologically smart and sustainable foundation.

The Economic Report further states that Africa is blessed with abundant land, water and energy sources and with a young and increasingly better educated population. Such abundance, when combined with capital investment, “can generate the prosperity, employment and sustainability needed to achieve the promise laid out in the African Union’s Vision 2063. Some African countries are making good progress, with a focus on water, energy and agriculture, systematically building low-carbon development and climate resilience into their plans and decision-making”.

The report is however quick to warn African countries  against the tendency to stand back and watch others take the lead in building a green economy – and to instead strive to benefit from their current low-carbon position and leapfrog the process.

Following the latter strategy means that many African economies can get it right the first time; infrastructure does not have to be retrofitted to make climate resilient, and high dependence on volatile fossil fuels can be avoided, bringing significant co-benefits for health and energy security.

It further reckoned that Africa can explore many ways to achieve green industrialization – starting with existing enterprises. Because of current high levels of waste and inefficiency at the plant level, supporting business to become more resource-efficient provides multiple opportunities for win-wins. And working at the systems level offer big opportunities for greening supply chains, infrastructure and, above all, energy generation.

The report also advises that “government has the central role in talking the long view – out to 2030 and beyond. Policy stability, effective public institutions and consistent implementation make all the difference in creating credible incentives to unlock private investment by small, medium and large enterprises. And while government must take the lead, it cannot hope to design, fund and achieve a green and inclusive economy on its own”.

Strong, long-term partnerships are needed with business, civil society organizations, community groups, municipal government, finance and research sectors. Each one bring its own skills, networks and interests to construct a shared vision for an inclusive green economy.

To add the cherry on top, the report reports that “Africa has a bright future that is within its reach. The continent is a ‘gold mine; a region with very significant natural resource assets, and significant growth and industrialization opportunities”.

Africa cannot continue on a business-as-usual trajectory if it truly wishes to industrialize and scale up broad-based development. Looking forward to 2050, and using a set of green agenda policy tools, many of the supply-demand gaps in energy closed if  major investments tap into Africa’s vast renewable energy resources.

The report stipulates that African countries face risks that require special attention from policymakers, including turbulence in the global economy. Africa’s vulnerability calls for a “rethink of its broader development strategy. Despite healthy economic growth often higher than elsewhere in the world over the last decade), it has rarely been inclusive: the number of Africans in absolute poverty had risen and inequality remains a major issue”.

Africa’s growth has been largely tied to exploit non-renewable natural resources – with minimal value added and employment generation – “sustainable growth has been undermined”.  Services dominate African economies’ value added as a share of the gross domestic product (GDP).

According to the economic report, “a green economy is considered to improve human well-being and social equity, while sharply curtailing environmental risks and ecological scarcities. It integrates economic, social and environmental policies and focuses on new opportunities for economic growth that reduce pressure on the quality and quantity of natural capital systems”.

As for the blue economy development, the UNECA publication acknowledges that as the Africa continent strives to address poverty, unemployment and underdevelopment, the opportunities offered by the blue economy can be exploited to support regional industrialization strategies and plans, and anchor socioeconomic development.

The Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) industrialization strategies allude to the significance of the sustainable utilization of the oceans and other water resources for transformation, and provide roadmaps for developing the sector. The domestication of the regional strategies and their implementation at national level will catalyze development in Southern Africa.

It is appreciated that the opportunities provided by the blue economy are vast and include not only waterway activities, but also related activities such as providing qualified human resources, land connectivity to the markets, manufacturing of equipment and spares, and value addition to the blue economy products.

While country-level domestication of the blue economy strategies has been slow, some Southern African countries have already established blue economy frameworks to support the development of this resource. The experiences from Mauritius, Seychelles, South Africa and Madagascar are instructive in terms of how blue economy resources can be harnessed and be part of the national development strategy.

According to the publication, despite all the positive benefits that the blue economy resources bring to humanity, human activities both ashore and at sea can lead to the deterioration and ultimate destruction of the marine environment. For example, the disposal of untreated domestic waste, plastic waste, industrial chemical waste and nuclear waste can degrade the marine environment.

Illegal and irresponsible fishing and deforestation have contributed to the destruction of fish stocks and their habitat. Thus, “deliberate measures need to be put in place to rehabilitate, protect and preserve the oceans and the seas for a sustainable blue economy”.  

The report concluded that the blue economy sector has potential to contribute to poverty eradication, industrialization and sustainable development in Southern Africa, and emphasizes the importance of policy harmonization and coordination among member states for a regional approach to optimizing benefits from the sector value chain.

According to the publication, the blue economy presents an integrated vision for creating wealth from the oceans within the limits of natural and economic systems. In the African context, this translates into the combined use of the seas, oceans, wetlands and inland waters (lakes, rivers and underground water) as an essential economic resource capable of complementing traditional resources in the eradication of poverty and in the enhancement of sustainable economic development as per the African Union 2012 pronouncement.

It is incontestable that ocean and inland water resources and activities are central to industrialization and economic development. Currently, ocean-based and related industries provide jobs for over 31 million people worldwide.

“Therefore unlocking the full potential of the blue economy and its related activities in Southern Africa will boost socioeconomic development, create jobs and contribute to poverty alleviation. Job and employment opportunities are essential for sustainability, intraregional cooperation and social integration. Thus, blue jobs are important and blue careers need to be nurtured to address the high levels of unemployment in the region”, stipulates the publication.

It is further posed that the African Union’s Agenda 2063 envisages the blue economy a major contributor to continental transformation and growth. The recognition for the importance of the oceans at continental level provides a framework for regional strategies underpinned by harmonized national policies.

Inclusivity in industrialization, and sustainable developments as targets within the concept of the blue economy, are about equity in access to, development and sharing of the benefits of blue economy resources among all states in the region, regardless of proximity to an ocean or a sea, or devoid of a significant inland water body or source.

All countries in Southern Africa have the potential to contribute through the blue economy sector development for regional sustainable growth and improved well-being of citizens.

As a tool for accelerated economic transformation and industrialization in Southern Africa, the blue economy entails the efficient and effective use of the seas, oceans and inland water bodies as resources for improving human livelihoods and fostering economic development.

With industrialization being inevitable in the process of promoting economic development, there arises the need to study how the blue economy can enhance economic development in the region.

Industrialization and economic development are a comparative phenomenon that is dynamic and dependent on what happens in other countries and regions of the world. “The slower the pace in adopting the blue economy philosophy the greater the gap in economic development”, it is decried.

Hesitancy and complacency will continue to place most African countries under the category of low income and underdeveloped – not only because the GDP will remain stagnant, but also because it will continue to be at the tail end.

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