Since the emergence of the COVID-19 pandemic there have been widespread efforts to energise manufacturing, particularly in the production of medical devices and health supplies. Industrial policy responses have included mandating the private sector to fire up the factories and shift production priorities – especially to health supplies – alongside imposing export bans across North America, Europe, Africa (in Senegal, South Africa and Kenya), Asia, South Korea and India, among others.
At the same time, extensive attention has been given to the importance of the manufacturing sector and the role it plays in the production of vaccines. Arguing for the adequate supply and equitable distribution of vaccines globally, Dr Ngozi Okonjo Iweala (Board Chair of GAVI, the Vaccine Alliance), has called for collaborative action across trade policy, manufacturing and research communities to protect against the risk of hoarding in so-called developed countries at the expense of access in Global South contexts. The Director General of the World Health Organisation, Dr Tedros Adhanom Ghebreyesus, has likewise been clear on the significance of manufacturing to ensure global vaccine availability.
It follows that the production of syringes, one of the most widely used medical devices globally, constitutes a significant manufacturing response to the pandemic. Syringes are essential for the treatment of non-communicable diseases such as diabetes and heart disease and for the administration of future vaccines. Despite the immense challenges the COVID-19 pandemic brings, it also presents opportunities to strengthen industrial development in the African context.
Africa’s re-orientated trade goals
The recently established African Continental Free Trade Area (AfCFTA), the world’s largest free-trade area, calls for prioritisation of the domestic African market in the continent’s journey towards socio-economic transformation. This heralds promise for industrial development given that intracontinental trade tends to be more diversified, with greater representation of continentally manufactured goods than Africa’s trade with the rest of the world.
In January 2020, as a panellist at the APPG Africa and APPG for Trade Justice symposium: UK-Africa Trade and Brexit, I listened to Dr Vera Songwe of the United Nations Economic Commission for Africa and Dr Akinwunmi Adesina, President of the African Development Bank, highlighting the recentring of the continental market as a key component of the promise of the AfCFTA. Prioritising domestic markets has been central to critical political economist Samir Amin’s call for socio-economic transformation in Africa. Domestic markets could challenge the continent’s colonial legacy of supplying raw materials to the global economy rather than investing in manufacturing.
The problem of unequal exchange between Africa and the rest of the world
Unequal exchange between parts of Africa and the rest of the world presents a challenge, especially around lower value natural resource exports and an overreliance on volatile commodity prices as a basis of economic growth and development. Indeed, the continent holds the vast majority of commodity dependent countries that are deemed as relying substantially on resources for their exports. As a result, it is disproportionally impacted by commodity price collapses. This occurred in 2014-15 when the continent’s largest economies, Nigeria, South Africa and Angola, fell into recession with wider adverse impacts. More recently, the COVID-19 pandemic has moved resource prices from the quarterly average of 49.4 USD over January to March 2020 to 30.4 USD in May 2020. Major declines in petroleum prices led to a May 2020 downward revision in the budget benchmarking oil price to 20 USD per barrel by Nigerian Finance Minister, Zainab Ahmed, with implications for its fiscal space.
Classical economic development theory offers a well-established logic for the significance of structural transformation of the economy. It also underscores the links between manufacturing and its dependence on raw materials from the agricultural and mineral sectors. Understanding these processes additionally highlights the importance of interactions between the state and the private sector, including foreign capital in the Global South.