Southern Africa Development Community (Sadc) countries, including Malawi, have been challenged to take advantage of periods of weak currencies to boost exports and use proceeds to grow the manufacturing sector.
This was one of the recommendations delegates made at the 22nd intergovernmental committee of experts (ICE) meeting of Southern Africa in Lilongwe on Friday if Sadc countries are to industrialise.
According to the communiqué, if Sadc countries take advantage of periods of weak currencies to boost exports, they can use the same resources to finance establishment of factories and other industries.
Reads the communiqué in part: “If we can use weak currencies to boost exports, we can easily support the growth of the manufacturing sector. Apart from that, there is need to reprioritise planned infrastructure projects during periods of reduced fiscal resources, utilise increased savings during high growth periods to maintain spending during economic downturns.”
The ICE meeting was co-organised by theUnited Nations Economic Commission for Africa (Uneca) Southern Africa Office and the Malawi Government under the theme Implementing the Sadc Industrialisation Strategy and Roadmap: Options and Prospects.
The meeting challenged Sadc countries to be prudent in borrowing in foreign currencies given the high exchange rate risk that could divert resources away from social spending towards servicing external debt and be more flexible in pursuit of the regional macroeconomic convergence targets to avoid social spending cuts that worsen poverty in the current economic situation.
“There is need to enhance domestic resource mobilisation to foster sustainable socio-economic transformation, ensure that the post-2015 Development Agenda is mainstreamed into national policies and strategies and increase investment in social infrastructure to facilitate efficiency and effectiveness in social spending,” reads the communiqué.
On industrialisation and financing, member States were urged to explore the viability of pension funds, financial services levies and sovereign wealth funds in financing industrial infrastructure and key commodity value chains.
“There is a need to introduce a levy on payroll to fund skills development, utilise opportunities provided through the regional development fund, mobilise resources towards implementing identified strategy priorities, accord priority to science, technology and innovation in national and regional programmes as the major catalyst for industrialisation,” it adds.
On capacity building, the countries agreed to strengthen technical capacity within relevant ministries and government institutions; share knowledge and expertise; including through secondment of officials among countries; develop capacity around specific sectoral chains and dialogue with relevant stakeholders such as the private, training institutions and development partners.
Minister of Finance, Economic Planning and Development Goodall Gondwe challenged the experts to accelerate the Sadc industrialisation agenda, saying almost all the countries that have industrialised in the world used resources from Africa.
“It is sad that while other countries have industrialised using African resources, we are yet to benefit from the very same resources that we have. It is painful that many years after independence our people are still living in abject poverty,” he said.