18 Aug 2020

The findings of a SADC secretariat’s assessment  of industrialisation in the region reveals a gloomy picture, Dr Stergomena Lawrence-Tax has stated.

Speaking during the 40th ordinary summit of SADC heads of states and government on August 17, she said the findings indicated that while integration had progressed, there was still work to be done to effectively promote industrialisation and improve economic growth in the region.

“The assessment shows that the structures of SADC economies remain undiversified, with a growing dependency on natural resources and export of unprocessed commodities characterised by stagnant industrial sector,” she said.

Dr Lawrence-Tax, who is SADC executive secretary, said the region’s natural resource based sectors, including agriculture and mining, she said still accounted for an average 25 per cent of Gross Domestic Product (GDP).

The assessment,  she said, revealed some improvement in intra-SADC trade flow which stood at 19.3 per cent in 2018, which was nonetheless significantly less compared to other regions. 

 She urged member states to improve competitiveness by addressing supply-side constraints and strengthen cooperation in cross-border infrastructure; deal with non-tariff barriers that remained a hindrance to the smooth of goods.

 She stressed the need for  member states to ratify and implement the SADC protocol on industry as an important instrument for promotion of an industrialised and globally competitive regional economy.

Meanwhile, SADC governments revenues are expected to fall drastically due to the decline in economic activity and commodity prices as a result of the COVID-19 pandemic.

 According to a statement from the SADC secretariat on the socio-economic impact of the pandemic on SADC economies, the majority of member states are grappling with increasing public debt,   which  is  on  the  brink  of  breaching  the  regional  threshold  of  60  per  cent  of GDP. 

“Industries are moving swiftly to build resilience, while governments are mobilising to safeguard citizens and manage the social and economic fallout.  

Combining these factors with the on-going  lockdowns around  the region, the platform to  trade  fairly  is  slowly being    skewed    with    some    players losing while others winning,” says the statement.

The International Monetary Fund’s Fiscal Monitor released in April  highlighted  that  COVID-19  outbreak  and  its  financial  as well as its    economic    consequences    will    cause a major increase in fiscal deficits  and public debt load. ends