Roundtable Discussions

Making the Most of Africa’s Commodities: Industrializing for Growth, Jobs and Economic Transformation

Date : 6/13/2013

Speakers : Abdalla Hamdok, UN Economic Commission for Africa;H.E. Hatem Saleh, Ministery of Industry and Foreign Trade;Alaa Arafa, Arafa Holding and ECES

The 2013 edition of the Economic Report on Africa suggests that Egypt together with eight other African countries have an opportunity to transform their economies through a commodity-based industrialization strategy that leverages on the continent's abundant resources, current high commodity prices and changing organization of global production process. Such a policy is necessary if the continent is to become a global economic power that can address the challenges of youth unemployment, poverty and gender disparities. Specifically, the report examines key constraints and opportunities for African countries to make the most of their commodities by adding value through linkage development.

With respect to Egypt, the report considers the textile industry of paramount importance to the economy, accounting for 5 percent of total GDP and 26.4 percent of industrial production. It employs more than half a million Egyptians and is a crucial foreign exchange earner. In spite of its superior raw materials, Egypt has been unable to exploit its advantageous position to the best of its capabilities. Egypt needs to direct more investments into weaving and dyeing of local fabrics instead of exporting the raw material, thereby limiting its comparative advantage in the textiles industry. Clearly, there is a need to create a niche market because competition with other countries such as China and Pakistan is difficult due to the huge differences in input and output costs.