United Nations: Changes in world order since the turn of the century -- including greater political stability in Africa and a bumper crop of commodities -- if handled right, provide an opportunity for Africa to become "a global economic power", said a UN report. (Agencies)
"The global economic and geopolitical changes of the last two decades have shifted the global traditional power structures and witnessed the emergence of new powers from the South," said a foreword to "Making the most of Africa's Commodities: Industrializing for Growth, Jobs and Economic Transformation", an economic report on Africa.
"This shift, driven largely by a revolution in information and communications technology, has led to substantial increases in cross-border capital flows and trade in intermediate goods, thus reflecting the rising importance of value chains," said the foreword.
It was written by Carlos Lopes, UN under-secretary-general and executive secretary of the UN Economic Commission for Africa (UNECA), and African Union (AU) Commission Chairperson Nkosazana Clarice Dlamini Zuma.
The report was released on Tuesday."Changes in demography, rapid urbanization and a prolonged commodity-price boom have also made huge global changes, all of which present unprecedented opportunities for Africa to overcome its legacies and embark on a bold agenda that will see the continent emerge as a global economic power," it said.
"African countries have a real opportunity to capitalize on their resource endowments and high international commodity prices, as well as on opportunities from changes in the global economy to promote economic transformation through commodity-based industrialization and to address poverty, inequality and unemployment," the 256-page report said.
"If grasped, these opportunities will help Africa promote competitiveness, reduce its dependence on primary commodity exports and associated vulnerability to shocks and emerge as a new global growth pole," it said. The question is not whether Africa can industrialize by ignoring its commodities, but rather how it can use them to add value, new services and technological capabilities, said the report in its executive summary. It said such a contention may not apply to all African countries and should not be the only way African resource-rich countries industrialize.
Making the most of Africa's commodities requires appropriate development planning frameworks and effective industrial policies that are evidence-based, said the summary. It urged caution against reliance solely on industrialization, saying it has not transformed economies.
"The seeds of its woes were sown during the colonial period but the problem worsened after independence with the failure of often externally generated industrial policies," the summary said.
"The colonial legacy is the result of the extractive nature of African colonialism, which left behind structures, institutions, and infrastructure designed to benefit non-Africans." As an example, it pointed to roads and railways built in colonial times and primarily designed to transport minerals and other raw materials to the continent's ports and shipped to Europe.
"They were not designed to join one part of the continent to another and created a legacy that is still felt in the 21st century, with production and export of commodities geared towards the needs of the former colonial powers -- not value addition," the summary said. But, it said Africa's "significant human and natural resources" can be used "to promote industrialization and structural economic transformation through value-addition strategies in all sectors."
According to the report, Africa has about 12 percent of the world's oil reserves, 42 percent of its gold, 80-90 percent of chromium and platinum group metals, and 60 percent of arable land in addition to vast timber resources.
"With such abundance and rising global demand for raw materials, African governments are forging new partnerships, boosting infrastructure investment and sharing skills and technology," the summary said. "But Africa can do better."
"Instead of relying on exports of raw materials, the continent should add value to its commodities to promote sustained growth, jobs and economic transformation," it said.
United Nations: Changes in world order since the turn of the century -- including greater political stability in Africa and a bumper crop of commodities -- if handled right, provide an opportunity for Africa to become "a global economic power", said a UN report.