To say that Africa is at a crossroads is an understatement. Continent presented as a future, it has colossal challenges to take up as much on the political and social levels as on the economic, industrial, financial and ecological levels. With a rapidly growing population, it must find solutions to give work to its large youth. For this, there is no other way than the creation of local value chains to finally take advantage of its gigantic agricultural and mining resources. The question of its industrialization in a fair global system in the face of the demands of climate change is therefore a major challenge that can only be met by economic diversification against the backdrop of strong integration, skilfully studied. To better decipher this equation, Antonio Pedro, acting executive secretary of the United Nations Economic Commission for Africa, confided in Point Afrique.
Le Point Afrique: Given what you know about the challenges that Africa faces, how could a Summit like the one on the new global financial partnership evolve or be a game-changer for African countries?
Antonio Pedro: As you know, before Covid, Africa was on a journey of growth. The rate was more or less 4% but the Covid demonstrated the weakness of our economic fabric. Most of our countries have economies based on the export of raw materials. With the sharp slowdown in world trade, Africa has not been able to export its resources. This has created problems for macro-economic stability. Countries have been unable to respond to the pandemic. Their economic systems have been weakened, their debt has increased and this has created a very dangerous cycle for Africa.
At the United Nations Economic Commission for Africa (ECA), we mobilized on a regular basis every Friday in meetings with all Ministers of Finance, Economy and Planning to discuss the response to be given. It was on this occasion that we created the platforms to buy vaccines for Africa. And we realized that the international financial system was not able to meet the needs of Africa and that it was necessary to carry out a profound structural reform.
In fact, the crucial questions that are being asked are: how to recalibrate this system created to meet the challenges of the devastation of World War II and the needs of the Marshall Plan into a system capable of meeting the needs of the 21st century, the needs of countries like ours which are the least developed? How to re-channel special drawing rights to countries that need them most? How to simplify the rules regarding debt restructuring?
The answers to these questions are all the more important since it is necessary to get out of a complicated and bureaucratic framework which strongly tests the populations and the States. Do you know that for example for Zambia, the negotiations lasted 27 months before an agreement could be signed. Remember that during this period, life goes on with its share of constraints to eat and buy the necessary. It is therefore necessary to increase liquidity on the continent because the pandemic and the crisis in Ukraine have cost Africa very dearly from a budgetary point of view because, in addition to the drop in revenue, money has become more expensive on the steps.
There is no doubt that to avoid finding ourselves in the situation we know, it must, if there is debt, finance the structural transformation of African economies by limiting our dependence on raw materials.
One of the major problems in Africa is the means of financing, therefore capital. What can be put in place to develop capital markets in Africa?
Funding is certainly one of the big problems we have, but it is not the only problem. There is the issue of implementation. Several plans have been put in place which show that the problem lies less with the vision than with the implementation. The Lagos plan is there to attest to this, but also the initiatives taken by ECOWAS, the African Union with Zlecaf, etc.
This vision must be accompanied by tools that allow it to be concretized at the political, legal and regulatory levels. The x-ray of our problems is not enough, we must put in place the necessary for the change to be real on the ground through a new ecosystem.
Otherwise, we need to identify with precision the structuring projects, the areas in which we must specialize and carry out real diagnoses in order to better support the main objectives of Zlecaf, including the facilitation of the emergence of regional value chains. is not the least.
To this end, we must work to organize better complementarity between the economies. This will increase the rate of intra-African trade to only 20% today against 70% for Europe and Asia. We need to take appropriate measures that will contribute to the establishment of a virtuous ecosystem for our economies.
What should be built into its resource governance for Africa to create more value and drive more inclusive development?
We must put industrial policy at the center of development and understand that the implementation of industrial policy concerns all ministerial departments. The explanation lies in the fact that we need to increase the competitiveness of our economies. This cannot be done without good training resulting from an education system aligned with market needs.
This is all the more true since we have found through a study that if the DRC and Cameroon do not exchange at the level at which they should do so, it is because the infrastructures do not allow it. As a result, these countries trade more with China and the United States than with each other. This is also true for Nigeria compared to its neighboring countries.
At the same time, the African private sectors must play their role and seize industrially promising sectors because the demand is there as well as the raw materials to manufacture the products demanded by these markets. Already in 2007, following meetings that we had organized with member countries of the OECD, we had come to the conclusion that Africa should have several mining companies.
The case of cement shows us that it is possible to create companies with a local chain, cement being manufactured with mineral materials. The same is true in the field of fertilizer production. Illustration: today we are working on the creation in Congo Brazzaville of a production of fertilizer from nitrate, natural gas, potash, as many raw materials as the country has.
This case is interesting because the creation of African companies promotes the creation of jobs and added value at the local level. This is the kind of approach that Africa needs. The continent is aware of this since in 2009 it adopted a plan which describes exactly how to move towards industrialization from its own natural resources. Director of the CEA office in Central Africa from 2016 to 2022, I can testify to the awareness of the need to diversify economically.
When in 2014, the prices of raw materials fell and the IMF arrived with its plan to restore the major balances, we said yes but we pushed for the adoption of what is called the Douala process from of which, working with the countries of the region, we have gradually contributed to setting up the special economic zone project of Pointe-Noire for the production of fertilizers and that for Cameroon in the field of wood and thus imitate the experience from Gabon.
This leads to talk about the Zlecaf. With this awareness, we have worked with countries to develop their national strategies. About thirty have thus been put in place to allow better economic diversification while protecting the raw materials necessary for local industrialization.
Between economic growth and compliance with the constraints imposed by climate change, Africa must carve out a path of sustainable development. What have you learned from your experience in this area about the thinking and actions that Africa could include in its initiatives to achieve meaningful results?
Africa needs to invest today to anticipate the challenges it will face tomorrow.
Let’s look at Europe. It has adopted a green deal to implement a process of progressive decarbonization of its production system. The first step was the introduction of a green passport. This concretely means that a product which does not have it cannot enter the market. This will be a significant barrier. At the same time, across the continent, there are nearly 600 million Africans who do not have access to electricity. Needless to say, to meet their needs, it will not be easy to settle for only renewable energy sources.
One of the solutions that seems to be able to be halfway between the many requirements linked to the measures to be taken to fight against climate change is that of natural gas on a continent where there are not enough hydroelectric dams. electrical.
That said, the development of the carbon market in Africa could be a way of allowing us to continue to use natural gas for energy production since this will allow us to hold carbon credits that can be monetized on the market.
There is also that taking into account the ecological services associated for example with the Congo Basin which constitutes a real lung is also another way of holding carbon credit. If the ton of carbon is estimated for example at 120 dollars, this can represent a windfall of more or less 82 billion dollars per year. A significant sum that would help finance infrastructure for renewable energies and thus participate in the gradual decarbonization of the system.
