Benchmarking Industrial Competitiveness in Africa The CIP 2020 - PowerPoint PPT Presentation

Benchmarking Industrial Competitiveness in Africa The CIP 2020 Report UNIDO Statistics Division 16 November 2020 1

CONTENTS 1. Introduction 2. Industrial competitiveness in Africa 2.1. Background and recent trends 2.2. The Competitive Industrial Performance (CIP) index 2.3. Data availability 2.4. Brief summary 3. Case study: Kenya 2 / 35

INTRODUCTION

1 2 3 What do we mean by “industrial competitiveness”? Why is industrial performance important? Is industrialization important for African countries? 4 / 35

1 2 3 What do we mean by “industrial competitiveness”? The capacity of countries to increase their presence in international and domestic markets while developing industrial sectors and activities with higher value added and technological content (UNIDO CIP Report 2013) 5 / 35

1 2 3 Why is industrial performance important? • Historically, an economic transition towards manufacturing enabled accelerated economic growth • Structural transformation is still considered the main engine of sustained growth in developing countries • A solid industrial base is the foundation of stable and resistant economies 6 / 35

1 2 3 Is industrialization important for African countries? • Essential factor to accelerate growth and higher level of sustainable development • Acknowledgement in development frameworks Third industrial development decade for Africa o 2030 Agenda for Sustainable Development o The Programme of Action for the Least o Developed Countries for the Decade 2011-2020 The African Union’s Agenda 2063 o 7 / 35

INDUSTRIAL COMPETITIVENESS IN AFRICA

1 2 3 2.1. Background and recent trends Africa represents 17.0% world population 2.8% world GDP global 1.6% manufacturing value added 9 / 35

1 2 3 World Africa GDP per capita 10 858 1 954 (2015 USD) Manufacturing value added 1 796 208 per capita (2015 USD) 10 / 35

1 2 3 Recent trends point to a widening gap… Share of MVA in GDP (in percent) 16 14 Africa World Source: http://stat.unido.org 12 10 2012 2013 2014 2015 2016 2017 2018 2019 11 / 35

1 2 3 …and a persistent deficit in manufacturing trade Manufacturing trade (in billions current US dollars) 500 Source: Own elaboration on the basis of UNCTADstat (2020). 400 300 200 100 0 2012 2014 2016 2018 Manufactured exports Manufactured imports 12 / 35

1 2 3 In fact, African share in world exports is falling for almost all products Source: Own elaboration on the basis of UNCTADstat (2020). Technology group 2012 2013 2014 2015 2016 2017 2018 2019 Primary products 11.7 10.5 9.9 8.8 8.2 8.9 9.0 8.8 Total manufacturing 1.4 1.4 1.4 1.2 1.2 1.2 1.3 1.3 Resource based 3.3 3.1 3.3 2.9 2.8 2.9 2.9 3.0 Low technology 1.2 1.1 1.1 1.0 1.1 1.1 1.1 1.0 Medium technology 1.0 1.0 1.0 1.0 1.0 1.0 1.1 1.1 High technology 0.3 0.2 0.3 0.2 0.2 0.2 0.2 0.2 Total exports 3.5 3.2 3.0 2.4 2.3 2.5 2.6 2.5 13 / 35

1 2 3 The continent has a competitive advantage on declining markets 4.0 Annual growth of world demand, 2012-19 Source: Own elaboration on the basis of UNCTADstat (2020). (in differences to the world average) High growth & 3.0 High tech comparative advantage Low tech 2.0 High growth & Medium tech comparative 1.0 disadvantage Total manuf - -2.5 -2.0 -1.5 -1.0 -0.5 - 0.5 1.0 1.5 Resource based manuf -1.0 Low growth & comparative -2.0 advantage Low growth & comparative -3.0 disadvantage Primary products -4.0 Comparative advantage/disadvantage (ln(RCA)) 14 / 35

1 2 3 2.2 The CIP Index in Africa But how is the continent performing in terms of industrial competitiveness? How can we measure it? 15 / 35

1 2 3 The Competitiveness Industrial Performance (CIP) index 16 / 35

1 2 3 The CIP 2020 examines the industrial competitiveness of 152 economies. The top performers in Africa: CIP African CIP global Dim.1 Dim.2 Dim.3 Economy Region ranking ranking (rank) (rank) (rank) 1 South Africa Southern Africa 52 70 58 39 2 Morocco Northern Africa 61 84 32 53 3 Egypt Northern Africa 64 105 56 46 4 Tunisia Northern Africa 67 72 38 70 5 Eswatini Southern Africa 83 57 39 113 6 Mauritius Eastern Africa 87 60 89 110 10 Nigeria Western Africa 99 134 86 63 11 Congo Middle Africa 101 98 90 102 Source: http://stat.unido.org 17 / 35

1 2 3 The complete African ranking CIP D1 D2 D3 CIP D1 D2 D3 Economy Region Economy Region (rank) (rank) (rank) (rank) (rank) (rank) (rank) (rank) South Africa Southern Africa 52 70 58 39 Cameroon Middle Africa 121 130 126 101 Morocco Northern Africa 61 84 32 53 U.R. of Tanzania Eastern Africa 123 137 111 94 Egypt Northern Africa 64 105 56 46 Zimbabwe Eastern Africa 124 129 116 115 Tunisia Northern Africa 67 72 38 70 Zambia Eastern Africa 125 131 134 112 Eswatini Southern Africa 83 57 39 113 Uganda Eastern Africa 128 139 127 111 Mauritius Eastern Africa 87 60 89 110 Mozambique Eastern Africa 132 138 136 119 Botswana Southern Africa 89 65 118 100 Central African Rep. Middle Africa 133 136 34 138 Namibia Southern Africa 97 76 123 109 Ethiopia Eastern Africa 134 146 113 104 Algeria Northern Africa 98 115 147 69 Cabo Verde Western Africa 136 122 88 146 Nigeria Western Africa 99 134 86 63 Madagascar Eastern Africa 137 141 145 124 Congo Middle Africa 101 98 90 102 Rwanda Eastern Africa 142 142 141 135 Côte d'Ivoire Western Africa 105 119 109 88 Malawi Eastern Africa 143 147 125 137 Senegal Western Africa 106 118 71 97 Burundi Eastern Africa 145 148 135 143 Angola Middle Africa 107 120 132 82 Gambia Western Africa 148 149 131 151 Gabon Middle Africa 110 83 146 117 Eritrea Eastern Africa 149 152 142 149 Ghana Western Africa 114 127 140 92 Niger Western Africa 151 151 104 131 Kenya Eastern Africa 115 132 115 89 Source: http://stat.unido.org 18 / 35

1 2 3 Average CIP ranks by subregion Eastern Middle Northern Southern Western Africa Africa Africa Africa Africa Africa CIP 130 114 73 80 123 113 Dimension 1 134 113 94 67 131 117 Manuf. VA per capita 135 118 97 82 127 120 Manuf. exports per capita 132 109 90 61 130 114 Dimension 2 125 106 68 85 104 106 Industrialization intensity 125 112 74 86 95 106 Export quality 118 83 69 81 105 99 Dimension 3 119 108 60 90 110 105 Impact, world manuf. exports 122 110 60 81 116 106 Impact, world manuf. VA 114 108 59 100 103 102 VA = value added. Source: http://stat.unido.org 19 / 35

1 2 3 2.3 Data availability CIP 2020 available for 33 African economies: • 4 with complete data o 29 with at least one variable imputed o For the rest of the economies, not enough data are • available to calculate the CIP This limits the evidence base for monitoring • industrial development and evaluating policy 20 / 35

1 2 3 2.4 Brief summary • In terms of competitive performance, UNIDO’s CIP indicates that African industry is lagging behind other developing regions of the world • Economies in Southern and Northern Africa performing relatively better • Limited data availability is an obstacle to providing the evidence base required • Performance indicators, such as the CIP, as crucial to monitor developments and guide policy 21 / 35

CASE STUDY: KENYA

1 2 3 3. Case study: Kenya We have chosen 3 country comparators: Côte d'Ivoire, Ethiopia and Sri Lanka. Why? • Ethiopia: Border country. Resource based. Similar GDP, MVA and share of MVA in GDP. Lower GDP per capita and MVA per capita. • Côte d'Ivoire: African country. Resource based. Similar GDP per capita. Higher MVA per capita and higher share of MVA in GDP. • Sri Lanka: Asian Economy. Resource based. World leader in the production of tea, as Kenya. Higher GDP per capita and MVA per capita. 23 / 35

1 2 3 3. Case study: Kenya Country comparison: General statistics GDP MVA annual annual growth growth rate rate GDP per MVA per Share of (1990- (1990- capita capita MVA in GDP MVA Population (billions) 2019, %) (billions) 2019, %) (millions) (dollars) (dollars) GDP (%) Economy Côte d'Ivoire 44,5 3,4 6,0 3,2 25,7 1.729,5 235,2 13,6 87,2 6,9 6,5 8,5 112,1 778,4 57,8 7,4 Ethiopia 79,8 3,9 6,7 2,5 52,6 1.517,8 126,6 8,3 Kenya 92,2 5,1 15,0 5,2 21,3 4.325,0 705,4 16,3 Sri Lanka Source: http://stat.unido.org 24 / 35

1 2 3 3. Case study: Kenya Country comparison: The CIP index and its dimensions Region Southern Asia Western Africa Eastern Africa Eastern Africa Economy Sri Lanka Côte d'Ivoire Kenya Ethiopia CIP (rank) 75 105 115 134 Dimension 1 (rank) 87 119 132 146 Dimension 2 (rank) 79 109 115 113 Dimension 3 (rank) 65 88 89 104 Manufacturing value added per capita (rank) 78 118 131 143 Manufacturing export per capita (rank) 95 119 132 146 Industrialization intensity (rank) 83 82 116 110 Export quality (rank) 87 129 111 106 Impact on world manufacturing exports (rank) 74 93 102 128 Impact on world manufacturing value added (rank) 60 83 79 81 Source: http://stat.unido.org 25 / 35