Mbabane – Minister of Finance Neal Rijkenberg has called on African governments to direct public procurement spending towards locally produced goods and services to drive industrialisation and sustainable growth across the continent. He said this approach would help unlock the full potential of the African Continental Free Trade Area (AfCFTA) and strengthen regional economies.
Rijkenberg made the remarks during the official opening of the 31st Session of the Intergovernmental Committee of Senior Officials and Experts for Southern Africa at the Royal Villas Hotel in Ezulwini. Eswatini is hosting this year’s edition of the regional forum, which brings together policy makers, economists and development partners to discuss industrialisation and economic integration in Southern Africa.
He told delegates that AfCFTA provides one of the greatest opportunities for development on the continent, creating a single market of 1.4 billion people with a combined gross domestic product of more than 3.4 trillion United States dollars. He noted that despite this potential, the region continues to rely heavily on exporting raw commodities, with more than 70 percent of exports unprocessed. He said less than five percent of copper output is manufactured locally even though Southern Africa produces almost 60 percent of Africa’s total copper.
The Minister said that to benefit fully from AfCFTA, the region must shift towards value addition, industrialisation and beneficiation. He explained that Southern Africa possesses a range of economic strengths that could be coordinated to support joint industrial development. He cited the example of battery production which could involve linking cobalt from the Democratic Republic of Congo with copper from Zambia and manufacturing capacity in South Africa.
Rijkenberg also pointed to agro-processing as a key priority for enhancing food security and increasing income generation across the region. He mentioned that the leather industry offers another opportunity for regional collaboration by linking livestock supply in one country with tanning and manufacturing facilities in another. He said such measures would help build industrial competitiveness, create employment and reduce exposure to fluctuations in global markets.
He told the meeting that trade barriers remain a major obstacle to achieving these objectives. He said that despite progress on tariff reductions, cross-border trade still suffers from delays, differing product standards and inadequate transport and energy infrastructure. To improve trade efficiency, he called for digitalisation of trade systems, including the introduction of electronic certificates of origin and harmonised customs procedures across Southern African countries.
Rijkenberg said industrialisation cannot progress without adequate financing. He drew attention to the 50 billion United States dollar financing gap affecting small and medium enterprises across the region. He said access to finance must be expanded to increase productive investment and allow local manufacturers to take part in regional supply chains. He also said skills development in manufacturing, logistics, digital trade and innovation is critical for building the region’s industrial capacity and that young people and women must play a central role in this process.
As Chairperson of the African Union’s Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration, Rijkenberg outlined an initiative aimed at using government procurement as a strategic tool for industrialisation. He explained that African governments collectively spend around 17 percent of their gross domestic product on procurement which amounts to about one trillion United States dollars annually. However, he noted that much of this expenditure does not sufficiently benefit African industries.
He said Eswatini is advancing the idea of a Right of Supply mechanism where governments across the continent would voluntarily commit to purchasing selected products from within Africa. He said this would help create predictable markets for African-made goods, promote regional specialisation and shift the continent’s economic focus from exporting raw materials to exporting finished products.
The Minister added that retaining more revenue within Africa through local procurement would allow governments to create fiscal space for increased social investment in critical sectors such as health, education and social protection.
United Nations Economic Commission for Africa Southern Africa Subregional Office Director Eunice Kamwendo said the Intergovernmental Committee of Senior Officials and Experts remains an important platform for reviewing regional progress and aligning development priorities. She said Southern Africa continues to face a range of global economic challenges including trade instability caused by international tariff changes, reduced access to development finance, increasing debt burdens, lower foreign direct investment and shrinking fiscal space.
She said the effects of climate change, including droughts, floods and cyclones, are further impacting infrastructure, food systems and energy generation which in turn increase pressure on public resources. Kamwendo noted that youth unemployment remains high across the region and called for urgent economic restructuring to create sustainable job opportunities.
She said the most viable path for Southern Africa is inclusive industrialisation supported by the AfCFTA. She said progress will depend on improving value addition, diversifying economies and trading partners, supporting job creation and transitioning towards greener economic activities. She concluded that the region must strengthen accountability by tracking progress on shared commitments each year.
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