Tribune Fighting for industrialisation and sovereignty is the same ‘For an African industrial plan’
I am often asked what I do for a living – as a young ‘repat’, born in Senegal, who studied and worked in France and elsewhere in Europe, and came back home two years ago. People expect me to answer that I am either an expert in the service of some ministry, or an executive in a banking institution – probably because of my glasses! – or, very often, a young ‘geek’ with a digital entrepreneurship project. And they are generally surprised when I explain that I work as an industrial director, on several projects on the Diamniadio platform.
By Ibrahima Sarr*
There is some surprise because people think that there is not much to be done on the industrial front in Senegal. And also, because people expect an industrial manager to be old, seasoned, a bit old-fashioned while they see young people as exploring the sectors perceived as the ones offering most opportunity, such as digital and finance. Personally, I am very proud that Dakar is a tech cluster, but in the long run, I cannot imagine my country, or Africa generally speaking, as a gigantic technical platform or incubator populated only by male and female developers. I accept to be on the side of the so-called ‘old economy’ despite my young age. I would rather say that I am on the side of the real economy – which undoubtedly needs technology, but above all, needs industries. In 2014, Africa accounted for only 1.6% of global manufacturing value added (UNIDO data, 2017). Today, African industry accounts for only 25% of African GDP (compared to 31% in 1980) and generates only $700 of GDP per capita on average, a figure three times lower than Latin American industry or East Asian industry (Bearing Point Data, 2019). The consequence is the extreme dependence of our economies on external imports – and in this period of pandemic and economic crisis, this dependence has proven to be dangerous. I came back to Africa to say ‘no’ to the industrial status quo. Yet, I say ‘yes’ to industrialization as I see it as such a necessity and economic opportunity that, compared to other sectors it could, rightly, be given priority in any emergence and development policy agenda.
Transform industrial projects into real eceonomic opportunities
Industrialisation equals activity and job creation: this is the virtuous equation often heard in the media, among experts and decision-makers. Industrialisation is certainly an economic opportunity, provided that certain conditions are met. We need to understand under which criteria an industrial project can be successful today, particularly in Africa, in order to be able to make a lasting difference. Unfortunately, we already have many examples of projects that have been launched, but without proper follow-up; companies that were confronted to great challenges, particularly in the textile sector, here in Senegal, a country where know-how is at risk of disappearing since there are not enough production units to apply it; others which have had to close down after only a few years, such as Nestlé in Congo-DRC, or go through major restructuring, such as Heineken in Congo-DRC, because the economic conditions were no longer there to move forward, after an increase in the cost of strategic production factors such as water or electricity.
So, what does it take to make any industrial project a success? Production factors, depending on market conditions and regulations, are important. Beyond that, two questions need to be asked, the first being what value chain can be put in place. An industrial project will be all the stronger as the direct value chain – partners, sub-contractors, and local or nearby inputs with the production unit – and the indirect value chain – distribution, marketing – will be reliable. Thus, around a shea butter cream, there are obviously workers who harvest, operators and agricultural processors, but also a transport operator, a certification and quality expert, a marketing expert and web designer who creates an on-line sales platform, an expert in marketing studies who constantly checks on the preferences of the target consumers, a logistics and product traceability operator – and all of them can work. The reliability of the value chain – direct and indirect – is a guarantee of success, as long as it has been designed upfront.
The second key question to be addressed to best take advantage of any industrial opportunity, is how you can move upmarket. Manufacturing locally, while importing inputs from far away can be dangerous, and result in uncompetitive prices – when the prices of the inputs fluctuate. Similarly, manufacturing locally products that are designed outside the continent, without an effective technology transfer, means we will always remain ‘industrial followers’. Fully agreed with efforts to enter the market COVID protective masks – as successfully done by several African countries. And as fully agreed also with initiatives aimed to produce more complex outfits, reserved for medical or highly exposed personnel. We need to look further than we usually do in Africa. On that issue, and in the context of the upcoming African continental free trade area, debates on the rules of origin and the definitions of ‘made in Africa’ products are a good example. On the one hand, if a strict rule of origin is put in place, requiring a high percentage of African inputs, it can create a difficult and frightening situation – especially given that the first industrial step in Africa is often the assembly of foreign components. On the other hand, such a rule can create an incentive to move upmarket, by building and managing a local value chain, and by setting up a process to revamp, adapt and create new products in order to always ‘stay ahead’. By definition, an industrial project has to evolve over time. Without going as far as to integrate a design department into his or her factory, each industrialist should have the means, to understand his or her market and how it will be transformed. The product manufactured today is not the one that will be manufactured tomorrow – but it is the one of tomorrow, and the one of the day after tomorrow that will guarantee lasting jobs. In the long term, industrial followers have no future. But industrial creators certainly do.
Transforming industrial projects into tools for political sovereignty
And the creator is the one who holds the power. This is what the COVID-19 crisis reveals in the end. The awakening was pretty brutal, in March 2020, when the whole world realized that China was the only one country (or almost so) able to mass-produce what all countries needed: masks, paracetamol, protective equipment for caregivers. If the developed countries – already industrialized, but whose leaders understand that too strong a shift towards the net economy and services can prove to be a double-edged sword – finally decide to re-industrialise in order to regain nothing less than their medical sovereignty, shouldn’t the developing countries that we are do the same?
Truth is that we have a unique opportunity to industrialise Africa and to industrialise it in the right way. Indeed, now that logistically and financially speaking it has become more difficult to import into the continent, we have the opportunity to develop many sectors. There is health, of course, but more broadly everything that affects people’s daily lives. Today my teams at Multi-Industries Group are working with the enthusiastic Afritex team on a promising project to produce ‘made in Senegal’ school uniforms, with the support of the Partnership for the Mobilisation of Savings and Credit in Senegal (PAMECAS), a local finance player. Another example is the project of the Société de Développement pour l’Emergence du Sénégal (SDES) to promote the development of the port of Kaolack through the creation of a manufacturing unit for machinery, agricultural equipment and cars. I would like to tell all those who feel energized and full of ideas: go ahead, more importantly, hurry up. If we do not act now to build our own industrial units, then in a year, in eighteen months, in two years, those who were exporting to Senegal will have resumed their activity – this time by producing directly from here. Then, if nothing has been done, we will not have much besides regrets. Those regrets will be all the bigger if some operating models imported can harm us in the long run – because Africa does not have to repeat the mistakes of the past. For me, a multi-purpose, non-polluting, connected factory – ‘digitally-enabled’ as they say! – is not just a word. By combining the knowledge accumulated over two centuries of industrialisation on all continents with African characteristics – including the opportunity offered by renewables to supply electricity – we can build this low-carbon, efficient factory of the future. That is what ‘industrialising the right way’ is all about. Creating workplaces that will be places to live, to share, to be productive, to feel proud together, to be creative. And not ‘sweatshops’ like those which are still the standard in developing countries.
* Ibrahima Sarr is general manager at Multi-Industries Group
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