Africa must boost manufacturing to cut poverty: UN study

11th July 2011, Comments 0 comments

Africa accounts for just one percent of the world's manufacturing and needs to boost the sector if it wants to reduce poverty, a UN report said Monday.

While developing Asia saw its share in global manufacturing rise from 13 percent in 2000 to 25 percent in 2008, Africa recorded a drop from 1.2 percent to 1.1 percent in the same period, said a study by the UN Conference on Trade and Development and the UN Industrial Development Organisation.

"Africa now accounts for about 1 percent of global manufacturing, and cannot realistically hope to reduce widespread poverty if its governments don't take effective measures to expand this vital economic sector," said the report.

In labour-intensive manufacturing, Africa's share slid from 23 percent in 2000 to 20 percent in 2008.

"Given the fact that most African countries are at an early stage of industrial development, one would expect the region to have very good performance in labour-intensive manufacturing activities," noted the report.

This has been the case in developing Asia, including China, where manufacturing has played a key role.

However, in Africa, the share of labour-intensive manufacturing was now at just 18 percent of the region's total exports.

Rather, the region is heavily dependent on resourced-based manufacturing, including refined petroleum, basic metals, as well as food and beverages. Such products make up about half the region's exports.

The UN study said that the region must broaden its manufacturing base and develop the sector.

"African countries should intensify efforts to develop manufacturing because it presents great opportunities for sustained growth, employment and poverty reduction," said the report.

In particular, building a strong intra-Africa market could boost demand for manufactured goods.

While the rest of the world is buying mainly commodities from Africa, there is demand for manufactured products in African itself, the report pointed out.

"The region is increasingly becoming an important source of export demand that could form the basis for initiating and sustaining industrial development," it said.

© 2011 AFP

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