Annual Forum 2016 - Industrialisation and the mining economy

The TIPS Annual Forum 2016 was held in partnership with the Centre for Competition, Regulation and Economic Development and the SARChI Chair in Industrial Development at the University of Johannesburg, and the United Nations University World Institute for Development Economics Research (UNU-WIDER), and in association with the Departments of Trade and Industry and Performance Monitoring and Evaluation.

Aim of conference

The conference aims to deepen understanding of regional industrialisation, the role of South Africa in that context, the value chains operating across the region, and the links between regional industrialisation and regional integration.  

Context for conference

The new millennium saw a significant turnaround in Africa’s growth prospects. During the period 2000 to 2010, Africa’s economic output tripled, increasing from US$587 billion to US$1.7 trillion. Poverty rates have dropped over the last 20 years from 60 percent to 38 percent. Going forward, seven of the ten projected fastest growing economies in the world over the next five years are located in Africa. Sub-Sahara Africa is expected to grow at an average of 5.4 percent per annum over the next five years. Yet commodities and the commodity boom are still key to growth in Africa. While there has been a significant increase in the manufacturing sector, in almost all African economies it still remains relatively small.

The linkage between industrial productive capacity, economic growth and level of development is an important consideration especially for the Southern African Development Community (SADC), as the region has low levels of industrialisation and ranks among the poorest in the world. Collectively, SADC is one of the least developed regions of the world in terms of industrialisation. In only one of the 15 Member States has the ratio of manufacturing value added to GDP risen above 20 percent. In more than half of member countries, the manufacturing sector’s contribution to GDP is less than 10 percent and in some cases lower than 5 percent. Furthermore, South Africa’s GDP per capita is five to seven times that of the rest of SADC, which is unusually large for a regional centre. 

Industrial development in the Southern African region therefore requires an approach that looks at the role of the lead economy and the opportunities for the smaller economies to increase their productive capacity and exports to South Africa. To further the regional development agenda it is important to understand the development of key industrial sectors and how regional value chains work in those sectors.    

Regional industrial development is tied into regional integration, which also covers market integration and infrastructure development. Regional integration can been seen as a useful tool towards stimulating economic development, supporting integration into the broader world economy as well as encouraging trade and securing economies of scale among the participating countries. In spite of the tariff liberalisation in Africa and all the advances in forming regional trade areas, however, there seems to be very little growth in intra-African trade, particularly in the Southern African region. 

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