RABAT, 26 September 2018 – The United Nations Industrial Development Organization (UNIDO) has continued its global presentations of the 2018 Industrial Development Report (IDR): Demand for Manufacturing: Driving Inclusive and Sustainable Industrial Development. The United Nations Economic Commission for Africa (UNECA) organized a session dedicated to the report during an expert group meeting on resource allocation, distortions and structural transformation in North Africa.
The event in the Moroccan capital brought together African and international academics, as well as experts specialized in governance and public policy issues, to discuss the impact of resource allocation mechanisms on structural transformation and, therefore, on countries' equitable and sustainable development.
UNIDO Research and Industrial Policy Officer, Nicola Cantore, delivered a keynote speech summarizing the main messages of the IDR 2018, drawing out some key findings of relevance for African countries. Among others, Cantore stressed the expansion of the middle class, the increase in real wages and the diversification of consumption as key drivers of the domestic demand in Africa. He noted that African countries with low manufacturing capabilities are not able to take full advantage of the benefits provided by increasing domestic demand.
On the foreign demand side, Cantore pointed to the importance of increasing the unit price and volumes of exports to sustain higher levels of GDP per capita. Between 2003-14, African countries, especially the least developed ones, have been characterized by high levels of manufacturing income in terms of trade growth, but with a very low increase of the export unit prices.
“Higher export unit prices, reflecting an improvement of the technological content and sophistication of products, will play a pivotal role in accompanying the structural transformation of the continent,” Cantore said. “Policymakers may play a pivotal role in this transition by affecting the framework conditions – such as the correction of market externalities – or by regulating the demand directly through procurement.”
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Research and Industrial Policy Officer
UNIDO Research and Industrial Policy Advice Division