. Lungu

By AUSTIN KALUBA –
“History is built around achievement and creation; and nothing was created in the West Indies” – VS Naipaul.
The Trinidad-born Nobel Prize-winning British writer VS Naipaul’s observation should serve as a reminder to many African societies who should know by now that history is usually hinged on creation.
Why then has industrialisation – which should normally be the buzzword for Africa considering that the continent is rich in minerals, oil and other natural resources – eluded us?
Africa’s experience with industrialisation over the past forty years has been disappointing considering that as late as 2010, sub-Saharan Africa’s average share of manufacturing value added in GDP was a paltry 10 per cent, unchanged from the 1970s.
At the high-level event on the operationalisation of the 2030 United Nations General Assembly agenda for Africa’s industrialisation in New York recently, President Edgar Lungu, having already inspired UN secretary-general Ban Ki-moon with the speech he delivered to Parliament on September 18, dissected Africa’s economic malaise and offered a panacea based on industrialisation, which Zambia is implementing under the Industrial Development Corporation (IDC).
President Lungu said industrialisation is indispensable for countries to achieve sustainable economic growth that is socially-inclusive and environmentally sound.
“It is, therefore, an inevitable solution to bring about the much-needed structural economic transformation. Industrialisation-induced structural economic transformation will enable our countries to diversify their economy, raise productivity, create better jobs and increase their competitiveness in the global market,” President Lungu said.
Mr Lungu noted the incongruity between development and gross domestic product, saying although Africa has recorded high gross domestic product growth rates and significant increase in total trade, the progress has had a limited impact on poverty reduction, livelihoods and access to economic and social opportunities.
Some scholars have noted that industrialisation, which is the period of social and economic change that transforms a human group from an agrarian society into an industrial one involving the extensive re-organisation of an economy for the purpose of manufacturing, is what has marked the yawning gap between the developed west and developing countries in Africa.
The latter process bears a remarkable impact on a country leading to industrial workers’ incomes rising, markets for consumer goods and services of all kinds expanding providing a further stimulus to industrial investment and economic growth.
The first transformation to an industrial economy from an agricultural one, known as the Industrial Revolution, took place from the mid-18th to early 19th century in certain areas in Europe and North America; starting in Great Britain, followed by Belgium, Germany, and France.
The “Second Industrial Revolution” labels the later changes that came about in the mid-19th Century after the refinement of the steam engine, the invention of the internal combustion engine, the harnessing of electricity and the construction of canals, railways and electric-power lines.
The invention of the assembly line gave this phase a boost with massive benefits to commerce in most European countries.
By the end of the 20th Century, East Asia had become one of the most recently industrialised regions of the world.
Without strong industries to create jobs and add value to raw materials, African countries have remained shackled by joblessness and poverty.
Countries like Zambia which produce copper, have the commodity priced on the world market and then imported back in form of secondary products.
It is the same gloomy scenario for countries like Côte d’Ivoire and Ghana which produce 53 per cent of the world’s cocoa and yet the supermarket shelves in Abidjan and Accra are stacked with chocolates imported from Switzerland and the UK, countries that do not farm cocoa.
This picture is repeated throughout the continent in different contexts. For example Nigeria, the world’s sixth-largest producer of crude oil, exports more than 80 per cent of its oil but cannot refine enough for local consumption.
With this grim picture, it is not surprising that last week, Nigeria’s President Muhammadu Buhari took personal charge of the country’s crucial oil portfolio by appointing himself oil minister.
Buhari said he would be minister of petroleum resources, with a junior minister taking charge of day-to-day affairs in the sector.
Normally, Africa should be home of industrialisation considering that the continent is also home to 60 per cent of the world’s underutilized arable land and has vast timber resources.
Yet together, African countries account for just 1per cent of global manufacturing.
Scholars have also noted that this dismal state of affairs create a cycle of perpetual dependency, leaving African countries reliant on the export of raw products and exposed to exogenous shocks, such as falling European demand.
It is evident that without strong industries in Africa to add value to raw materials, foreign buyers can dictate and manipulate the prices of these materials to the great disadvantage of Africa’s economies and people.
The Patriotic Front (PF), formed by the late President Michael Sata, was largely voted into office by the urban poor with the party sweeping local government seats on the Copperbelt and Lusaka, and a large number of the urban constituencies in the Northern and Luapula provinces.
Despite defecting to the MMD during Zambia’s revertion to multipartism in the 1990s, Sata was a ‘UNIPist’ at heart and resurrected a number of policies that the first ruling party had implemented.
One such policy was the IDC which the PF incorporated as a company with an initial investment of K20 million.
However, when President Michael Sata announced the establishment of the IDC, the announcement attracted mixed feelings from a cross section of society with some people fearing a return to the days of the mixed economy during the First Republic.
The fears of some people were that the institution would crowd out the private sector, confuse the economic landscape due largely to political interference from the ruling party, as was the case in the UNIP era.
This is because sceptics likened the now incorporated company to Industrial Development Corporation (INDECO) of the UNIP days which collapsed due to a number of factors which, besides political interference, included mismanagement as most appointments to key positions were not on merit but along political patronage.
Sata’s successor Edgar Lungu, the lawyer-turned politician, is even more passionate than his predecessor in pursuing this economic crusade.
Recently, Lungu transferred the shares of 29 out of 33 State Owned Enterprises (SOE’S) from the Ministry of Finance to the IDC.
President Lungu said line ministries would now focus on policy making, giving the IDC direct mandate and authorisation to oversee performance and accountability of the SOE’S on behalf of Government.
Mr Lungu, who is also chairperson of the IDC, said the SOE’S would with effect from next year not receive funding from the National Budget to reduce pressure on the Treasury and allow more funds to be channelled towards poverty alleviation programmes.
The IDC’S oversight responsibilities include all aspects of governance, commercial, financing, operational and all matters incidental to the interests of the State as shareholder.
“The IDC is a tool to enhance domestic capital formation, wealth creation and preservation by focusing on exploiting our country’s advantages in natural resources and actively developing industries and enterprises to create jobs for our people,” Mr Lungu said.
He said the IDC would work to maximise the value of Government shareholding and ensure that SOE’S contribute to the Sovereign Wealth Fund (SWF) which will focus on stimulating investment in strategic non-mining industries to increase exports.
The Head of State reiterated Government’s commitment to industrialisation and job creation in order to create a better Zambia for all.
SOE’S to be superintended and owned by the IDC include; Afrox Zambia PLC, ESCO Limited, Indeni Petroleum Refinery, Indo Zambia Bank Limited, Kagem Mining Limited, Kariba Minerals Limited, Lusaka South Multi Facility Economic Zone Limited, Lusaka Trust Hospital and Medical Stores Limited.
Others are; Mpulungu Harbour Limited, Mukuba Hotel Limited, Mulungushi Village Limited, Mupepetwe Development Company, Nanga Farms PLC, Nitrogen Chemicals of Zambia Limited, Zambia Daily Mail, ZESCO Limited, ZAMTEL Limited, ZAFFICO Limited.
Zambia International Trade Fair Limited, Zambia Printing Company Limited, Zambia Educational Publishing House, Zambia China Mulungushi Joint Venture, Zamcapital Enterprises Limited, Zambia Railways Limited, Times Printpak Zambia, ZSIC Group Limited, ZANACO PLC and ZCCM-IH, are also owned by the IDC.
SOE’S whose transfers are yet to be completed include; MOFED London, MOFED Tanzania, Mulungushi International Conference Limited and NIEC Business School Trust.
It is clear that industrialisation this time will be properly harnessed to ensure it bears economic fruition that has eluded our country for decades.