By Andualem Sisay Gessesse, Busan, Korea – If African countries have to replicate the industrialization development model of Japan and Korea, which have managed to develop their manufacturing industries in short period of time, government need to play crucial role, President of African Development Bank said.
“The role of the state is key for developing manufacturing industries. Korea and Japan are good examples for this. In the 1960s Korea was where many African countries are now… Today the per capita of Korea is $25,000,” Akinwumi Adesina, African Development Bank (AfDB) President said, this morning speaking to journalists in Busan, Korea ahead of the annual meetings of the Bank.
As an example the potential for African countries to add value and generate more revenue and create more jobs, Adesena mentioned the global chocolate industry, which is worth $120 billion. He indicated that West African countries, which produce most of the cocoa being exported for manufacturing of chocolates, can themselves benefit from the industry by involving in the processing of the cocoa beans.
“Africa’s fastest industrialization path is agricultural industrialization…That is the kind of growth, which lifts African people out of poverty and improves the quality of their lives…And we have a plan for that,” he said, mentioning that the Bank is working to increase the currently $700 billion Africa’s industry to increase to $1.72 trillion in the coming ten years. “By that time Africa’s total DGDP will be $5.6 trillion,” he said.
Commenting how possibly can Africa countries afford to finance the development of manufacturing industries, President Adesina mentioned multiple means of resource mobilizations. This includes government tax revenue of African countries which all together now is estimated to reach half a trillion per year, and the increasing foreign direct investment the continent is attracting now estimated around 60 billion per year.
He also mentioned the need to mobilize money from capital markets in Africa, multilateral international financiers such as AfDB and pension funds from across the world.
“It is not only about the money. Knowing what to do is critical,” he said, stressing on the importance of careful selection and prioritization of the industries each country needs to take advantage of and become competent in global market.
Besides, the business and regulatory environment has also need to be right in African countries in order for them to develop their manufacturing industries, become competent in the global market and ultimately improve the living standards of their people.
The reason the Bank has decided to host its 53rd annual meeting in Korea is to hear from the country’s experience, according to Adesina.
“No region or country I the world industrialized by exporting raw materials…Africa needs to add value to its products, create more jobs and needs to be more competitive in the global market… Korea was like many African countries in the 1960s,” he said, stressing that the role the government has played for the development of the manufacturing industries, which makes the country today one of the high-tech manufacturing hub.