www.unido.org. improving industrial performance & promoting employment in the southern african...
TRANSCRIPT
www.unido.org
www.unido.org
IMPROVING INDUSTRIAL PERFORMANCE & PROMOTING EMPLOYMENT IN
THE SOUTHERN AFRICAN DEVELOPMENT COMMUNITY THROUGH
PRODUCTIVE AND TRADE CAPACITY BUILDING
Dr. M.L. DhaouiDeputy to the Director PTC/TCB
Head of Productivity, Quality and Upgrading UnitTrade Capacity Building Branch- UNIDO Vienna
SADC Expert Group Meeting6-8 December 2006, Pretoria, South Africa
www.unido.org
Table of Contents
The Global Context
African Productive Capacity Initiative (APCI)
UNIDO Industrial Modernization and Upgrading Strategy and Objectives
Examples of UNIDO Industrial Modernization and Upgrading Programmes
A case study of Building Productive and Trade Capacity: Development of the Cotton Value Chain in Africa by UNIDO
UNIDO TCBI in Action at the Regional Level: The UEMOA Programme
www.unido.org
Opportunities deriving from Globalization
The Global Context (1)
Globalization is the major driving force of global economy and is spurred by a number of interrelated political and economic factors
Trade is intricately linked to growth, poverty reduction and job creation
Trade liberalization and the Doha Round offer opportunities to developing countries (DC) to see their industrial and export sectors flourish
The World Bank estimates that a successful Doha Round will relieve 140 Million people from extreme poverty
For the lone African continent, a successful Doha round would represent $70 Billion dollars, which is equivalent to 5 times the amount of aid received by the continent
www.unido.org
• Most African countries have not been able to benefit from trade liberalization nor from preferential agreements such as AGOA or EBA (see graph next slide).
• There is a threat that a majority of SADC countries are being marginalized in the globalization process
• SADC countries’ participation to trade is hindered by:
1. A lack of necessary productive capacities to sustain a production of sufficient quantity and quality that meets the demand’s requirements;
2. An incapacity to prove that the potential export goods meet the international (market) requirements
3. Problems of integration/connectivity to the international market
The Global context (2)
Challenges coming with Globalization
www.unido.org
World Trade 1970-2003:World Trade 1970-2003:Who are the Winners?
Source: UNCTAD
0
2
4
6
8
10
12
14
16
1970 1975 1980 1985 1990 1995 2000
World
Industrialized
Developing
Low IncomeLDCs
2003
Trillion US$
www.unido.org
SADC Countries: Key ChallengesSADC countries (except RSA and to a limited extent Zimbabwe) suffer from:
a lack of “enabling environment” (institutional and infrastructure);
a lack of supply-side capacities to produce capital and intermediate goods, which impairs regional and national economic development;
an inability of existing enterprises to produce and sell “tradable” goods competitively.
SADC countries export mainly (ca. 90%) primary and unfinished goods such as mineral and agricultural products and the region does not enjoy a diversified production.
In order to increase the percentage share of SADC trade in the world market,
SADC is currently working on establishing a Common Market within a reasonable time frame; SADC countries must also comply with and implement WTO obligations
www.unido.org
SADC (2)
• The Regional Indicative Strategic Development Plan (RISDP) focuses, inter alia, on promoting trade, economic liberalization and development as a means of facilitating trade and financial liberalization, competitive and diversified industrial development and increased investment through the establishment of a SADC Common Market.
• In order to attain these goals, SADC countries need, among other priorities, to enhance competitiveness through industrial development and increased productivity in all sectors;
• The attainment of enhanced competitiveness and increased productivity requires that concerted efforts are put in place to tackle the supply-side constraints - the problem of lack of effective industrial productive capacity being faced by majority of the SADC member countries.
• UNIDO, under the APCI, and through the Trade Capacity Building Initiative can effectively contribute to the achievement of this goal
www.unido.org
The African Productive Capacity Initiative
The APCI is in line with the following MDGs:
1. MDG 1: Reduce extreme povery and hunger2. MDG 3: Promote gender equality and empower women 3. MDG 7: Ensure environmental sustainability4. MDG 8: Develop a global partnership for development
The APCI, adopted during the 16th meeting of the Conference of African Ministers of Industry (CAMI) and by the African Union (AU) in 2004, is an integrated programme that aims to enhance sub-regional value chains through the strengthening of existing supply-side
capacities.
www.unido.org
The African Productive Capacity Initiative
The overall objective of the APCI is to strengthen African productive and trade capacities and capabilities in order to facilitate African integration into the global market and enhance African countries’
economic and industrial governance.
The specific objectives of the APCI are to:
1. Develop a common African vision of production based on the concept of value chain;
2. Harmonize industrial strategies and policies at the regional and national levels;
3. Identify sectorial priorities of segments of the value chain in which Africa holds a comparative advantage;
4. Propose sub-regional programmes, financed by a special fund, aimed at strengthening productive capacities within the NEPAD framework and involving the public and private sector as well as regional institutions
www.unido.org
UNIDO TCB Initiative Several services contribute in the implementation of the APCI,
- Agro-Industries;- Small and Medium Enterprises;
- Investment and Tachnology Promotion- Trade Capacity Building.
The UNIDO TCB Initiative focuses on enhancing the supply capacities and, thus, contributes to the realization of a considerable increase in share, volume and amount of the Manufacturing Value Added (MVA) and exports of developing countries.
The UNIDO Trade Capacity Building Initiative provides developing countries with technical assistance for the implementation and upgrading of institutional reforms, support infrastructures and competitive productive capacities in order to:
Facilitate their integration in the world market;
Overcome tariff as well as non-tariff trade barriers;
Create a favourable trade environment.
www.unido.org
•If SADC Countries are to adequately avail of the benefits of trade liberalization, fundamental changes are necessary in their pattern of industry and trade.
The objectives of reorientation of industrial strategies, policies and programmes in SADC countries must be to bring about a qualitative change in industry to ensure competitive and accelerated production capability in industrial sub-sectors.
UNIDO TCB Initiative
How to take advantage of the positive effects of globalization?
www.unido.org
Instead of the traditional pattern of import substitution, the emphasis should shift to an export-oriented strategy for the promotion of private-sector enterprises in selected priority sectors, where some SADC Countries continue to have significant competitive advantages.
One of the UNIDO responses to this challenge is the development and implementation of
Industrial Modernization and Upgrading programmes.
UNIDO TCBI
How to take advantage of the positive effects of globalization?
www.unido.org
PRE CONDITIONS FOR PRODUCTIVE CAPACITY DEVELOPMENT:
The three Cs
1. Enhanced COMPETITIVENESS of Supply CapacityCountries must have marketable products to sell
2. Recognized CONFORMITY with standardsProducts must meet market/client requirements
3. Efficient CONNECTIVITY to Markets
Rules for trade, customs must be harmonized
UNIDO TCBI
www.unido.org
UNIDO TCBI
DevelopCompetitive
ManufacturingCapability
Prove Conformity with Market
Requirements
Connect to the Market
Products to Market
ConnectConformCompete
….by upgrading supply capacities and standards infrastructures
PRODCTS
MARKETS
UNIDO RESPONSE
www.unido.org
UNIDO TCB Initiative
UNIDO TCB INDUSTRIAL
MODERNIZATION & UPGRADING STRATEGY
Developing productive capacities &Enhancing competitiveness of existing industries
www.unido.org
The restructuring and upgrading of an industry or an enterprise can be defined as a process which consists of preparing for international competition and aims at improving continually quality, competitiveness and increasing export capacities.
The restructuring and upgrading of an industry or an enterprise can be defined as a process which consists of preparing for international competition and aims at improving continually quality, competitiveness and increasing export capacities.
To examine an industry or an enterprise in its full environment, a multidisciplinary approach is required, consisting of an analysis of the macro and industrial economic framework, and all dimensions of the industrial base.
Modernization and Upgrading StrategyModernization and Upgrading StrategyModernization and Upgrading StrategyModernization and Upgrading Strategy
UNIDO TCBI
www.unido.org
ECONOMY
INDUSTRY Export policyTariffs
Economic climateLegal environment
Political environment
Factors of Competitiveness
Industry support institutions
Technology
Investment climate
Industry R & D
Demand pattern
EXTERNAL SOURCES
OF
COMPETITIVENESS
ENTERPRISEManagement and Quality
ManagementMarketing/Sales
Industrial Operations Management
Finance/Cost AccountingHuman Resource
Development
INTERNAL
SOURCES
OF
COMPETITIVENESS
www.unido.org
Improving the competitiveness and
development of industrial enterprises
Modernising theIndustrial
environment
Promoting the development of
competitive industries
Strengthening the capacities of support
institutions
Modernizationand upgrading
programme
Modernization and Upgrading ProgrammeModernization and Upgrading Programme
UNIDO TCBI
www.unido.org
Institutional and Sub-sectoral level:for similar and related enterprises, it deals with common problems: competition, quality, investment promotion, technology, R & D, etc.
Macro-industrial policy level:to remove obstacles to industrial restructuring and upgrading and to facilitate market-oriented reforms, it also addresses transition issues as well as the establishment or strengthening of institutions to facilitate industrial growth;
Enterprise level:it is concerned with Continuous Improvement of Quality and Competitiveness.
Modernization and Upgrading ProgrammeModernization and Upgrading ProgrammeModernization and Upgrading ProgrammeModernization and Upgrading Programme
UNIDO TCBI
www.unido.org
AT THE ENTERPRISE LEVEL
Overall strategic diagnosis
Formulation of the upgrading plan and financing scheme
Approval of the upgrading plan
Implementation and follow-up of the upgrading plan
AT THE ENVIRONMENT LEVEL
Institutional & regulatory environment
Industrial Support & Business services
Banking and financial environment
Investment incentives and promotion
Export Domestic
THE UPGRADING PROCESS
COMPETITIVENESS
Modernisation of equipment
Organisation and management
systems
Productionsystems
Training &skills
development
Quality &certification
Marketing & consortia
development
Alliance &Partnership
www.unido.org
Examples of UNIDOIndustrial Modernization &
Upgrading Programmesat the national and sub-regional
levels
Examples of UNIDOIndustrial Modernization &
Upgrading Programmesat the national and sub-regional
levels
www.unido.org
National Upgrading ProgrammesNational Upgrading ProgrammesTunisia, Morocco, Algeria, Egypt (1)Tunisia, Morocco, Algeria, Egypt (1)
Tunisia, Egypt, Morocco and Algeria have signed the agreement of association with the European Union, which includes the establishment of a Free Trade area between the E.U. and these countries.
The Free Trade Area presents opportunities (a market of 350 million consumers) and threats (competition) for these countries’ industrial enterprises.
In order to face this competition, national programmes of “Mise à Niveau” - “upgrading of industries” were launched in Tunisia (1995), Morroco (1999), Algeria (2001), Egypt (2001). A similar programme was launched in Senegal in December 2004. The EU, the World Bank, France, Italy,…contributed in the funding of the pilot and national programmes. UNIDO provided the technical assistance for developoment and implementation of pilot and national programmes.
www.unido.org
Achievements: As at end of June 2006:Achievements: As at end of June 2006:-Number of enterprises participating in the Programme: 4000-Total upgrading investments approved: Billion US$ 3.1-Total of Immaterial Investments: Billion US$ 0.5
Impact:Impact:-Increase in sales per year : 18 %-Increase of export per year: 18 % -Increase in Employment per year: 5 %
Achievements and ImpactsAchievements and Impacts
National Upgrading Programmes in Tunisia (2)National Upgrading Programmes in Tunisia (2)
www.unido.org
National Upgrading Programme in Egypt (1)National Upgrading Programme in Egypt (1)
ACHIEVEMENTS: Building Capacities
Project Approval: November 1998
Duration: 5 years
Budget: Euro 420 million (EU grant Euro 250 million)
Number of beneficiary enterprises: 5000
Business environment
Strengthen of Export capacitiies
Development and upgrading of Technical centers, laboratrories,
UNIDO provided Technical assistance for upgrading industries
in Borg Al arab region ( 150 industries from different sectors)
Training of more than 150 national experts in Upgrading technics
www.unido.org
Main Sectors Served (Ongoing & completed )
Chemicals6%
Pharmaceutical8%
RMG & Textile12%
Food26%
Furniture& wood2%
Engineering24%
Other fields22%
UNIDO assistance: Total 150 interventions
National Upgrading Programme in Egypt (3)National Upgrading Programme in Egypt (3)
www.unido.org
National Upgrading Programme in Senegal (1)
Funding of the National Upgrading Programme
FINANCIAL PARTNERS
Agence française de Développement (AfD) African Development Bank (ADB)
Centre for the Development of Entreprises (CDE) Luxembourg
BUDGET
8 Billion CFA Francs mobilized (13 millions d’euros) 80% of this fund dedicated towards the enterprises
www.unido.org
ACHIEVEMENTS
160 beneficiary enterprises
150 national experts trained in upgrading technics
Upgrading office established and operational
National Programme for Upgrading and scheme for funding developed ( under clearance and approval by the Government)
52 directors benefiting from 3 awareness workshops on upgrading
66 financial institutions and/or non-financial support institions registered on a database available on the following website (www.pmn-senegal.org) and distributed on CD-Roms
National Upgrading Programme in Senegal (2)
www.unido.org
OBJECTIVES SPECIFIC OBJECTIVESSPECIFIC OBJECTIVES
Create an environment which will allow the development of support structures that will provide the enterprises with the necessary skills and qualifications;
Enhance the competitiveness of entreprises to foster exports and employment creation;
Reinforce the capacities of entreprises in order to enable them to adapt to technological evolution and to the requirements of regional integration and international competition.
Sub-Regional Upgrading Programme in UEMOA (1)
www.unido.org
FUNDING
The global upgrading programme aims to assist 1000 industrial entreprises over 5 years. It is estimated that this action will cost US$403 Million, including $US20 Million for the Pilot Phase;
To ensure sufficient and sustainable financial ressources for the Programme, it is seen as necessary to establish 2 Funds:
A Restructuring Fund ($US 36 Million) to finance the restructuring activities;
An Upgrading Fund ($US 175 Million) to finance the upgrading activities.
Sub-Regional Upgrading Programme in UEMOA (2)
www.unido.org
The Pilot Phase
The pilot programme aims to launch the upgrading programme for 120 enterprises;
The pilot phase’s activities will also include capacity building and the development of a technical centre;
The pilot phase will focus on agro industries with high export potential.
France (AFD) financed the pilot programme:
Total Budget: €16 Million UNIDO designated as the implementing agency
Sub-Regional Upgrading Programme in UEMOA (2)
www.unido.org
BENEFICIARIES
Sub-Regional Upgrading Programme in UEMOA (3)
The main beneficiaries of this programme are:
The UEMOA Countries: Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo;
The Support Structures: Technical centres, laboratories,
The Enterprises with big potential for value-added, employment and export (food, fisheries, cotton-textile companies…)
The National Consultants, Engineers and Technicians
www.unido.org
COMPONENTS & OUTPUTS
Sub-Regional Upgrading Programme in UEMOA (4)
COMPONENT 1: Strengthening of sub-regional and national institutional capacities in the field of upgrading
– Output 1.1: Conception of the regulatory framework and of the procedures of the sub-regional upgrading programme;
– Output 1.2: Establishment of a regional coordination and monitoring committee for the sub-regional upgrading programme;
– Output 1.3: Assist in formulation a harmonized upgrading programme for each country;– Output 1.4: Assist in formulating a uniform regulatory framework and uniform procedures for
the 8 countries;– Output 1.5: Establish national structures to coordinate and monitor the upgrading
programmes;– Output 1.6: Formulate and carry-out a communication to promote the sub-regional and
national upgrading programmes;– Output 1.7: Establish an assessment chart for the upgrading programmes at the sub-regional
and national levels;– Output 1.8: Strenghten the institutional capacities of the Ministry of Industry, SMEs, CEOs,
Professional Associations to enable the elaboration and the monitoring of the upgrading programmes;
– Output 1.9: Strengthen the capacities of the service providers in order to carry-out the upgrading programmes.
www.unido.org
COMPONENTS & OUTPUTS
Sub-Regional Upgrading Programme in UEMOA (5)
COMPONENT 2: Assist in conveiving and carrying out the funding mechanisms of the sub-regional upgrading programme and then of the national upgrading programme
– Output 2.1: Feasibility study for the creation of a Restructuring Fund and of a Upgrading Fund;
– Output 2.2: Conception of the mechanism procedures of these Funds;– Output 2.3: Assist in establishing these two Funds
COMPONENT 3: Creation and strengthening of capacities of industrial support institutions in the field of upgrading
– Output 3.1: Strengthen the regional technical skills through the training of 80 consultants/trainers/engineers/Technical Centres and bank employees
– Output 3.2: Upgrade the Technical Centres
www.unido.org
COMPONENTS & OUTPUTS
Sub-Regional Upgrading Programme in UEMOA (6)
COMPONENT 4: Creation and strengthening of the capacities in the field of upgrading
– Output 4.1: Elaborate diagnostic for the Restructuring of 60 agro-industrial enterprises;
– Output 4.2: 60 agro-industrial enterprises assisted for their restructuring
COMPONENT 5 : Pilot programme to support the upgrading and enhance the competitiveness of enterprises
- Output 5.1: Elaborate strategic diagnostic for the upgrading of 60 agro- industrial enterprises
- Output 5. 2: 60 agro-industrial enterprises selected and assisted for upgrading
www.unido.org
EXPECTED IMPACTS
The Upgrading Programme is expected to have a significant impact on the industrial sector and on the economic drive of UEMOA, in particular:
Increase of 10% per year of the industrial production and of the profits of the beneficiary enterprises;
Production costs reduced and controlled;
Quality improvement and certification of 60 enterprises;
Capacities of support, consulting and assistance structures strenghtened;
Revival of some productive activities;
Increase of 12 to 15% per year of the industrial value added;
US$285 Million invested to rehabilitate and modernize the enterprises;
6000 to 8000 jobs created per year;
Increase of 10% per year of the export revenue
Sub-Regional Upgrading Programme in UEMOA (7)
www.unido.org
Impact of the programme?Impact of the programme?Impact of the programme?Impact of the programme?
CriteriaCriteria Examples of other countries Examples of other countries UEMOA objectives of the pilot programme
UEMOA objectives of the pilot programme
Tunisia + 18% per yearTunisia + 18% per year
+ 10 % per year+ 10 % per yearIndustrial Production Industrial Production
Value added Value added + 12 % to 15% per
year+ 12 % to 15% per
year
Tunisie US$ 500 000 per enterpriseTunisie US$ 500 000 per enterprise
InvestmentsInvestments US$ 300 000 dollar per enterprise
US$ 300 000 dollar per enterprise
CHAPITRE 3: Impact du programme
www.unido.org
Impact of the programme?Impact of the programme?Impact of the programme?Impact of the programme?
CriteriaCriteria Other countries Other countries UEMOA objectivesUEMOA objectives
Employment Employment Tunisia + 12 % per year per enterprise Tunisia + 12 % per year per enterprise
+ 10 % par an+ 10 % par an
ExportExport Tunisia + 18 % per year Tunisia + 18 % per year
+ 10 % per year+ 10 % per year
CHAPITRE 3: Impact du programme
www.unido.org
ECOWAS Restructuring and Upgrading Programme:
At the request of ECOWAS and UEMOA Secretariats and the EU,
UNIDO will develop in the first semester 2007 a pilot sub-regional
upgrading programme for ECOWAS countries. The EU will finance,through the 10 th Economic development Fund, the programme in order to assist and
support the Economic Partnership EU-ECOWAS.
www.unido.org
THANK YOU FOR YOUR ATTENTION