ADDIS ABABA, Nov. 4 (Xinhua) -- Albert Muchanga, African Union (AU) Commissioner for Trade and Industry, has called on African countries to make concerted efforts to promote innovation in the manufacturing sector to rebalance the foreign trade deficit.
"In a majority of our countries, the share of manufacturing in the gross domestic product, as well as employment from the manufacturing sector are very low. The same is true with the share of manufacturing in the export baskets of most of our countries," an AU statement quoted Muchanga as saying on Thursday.
He said African economies face, among others, low productivity, low rates of economic growth, progressive decline in Africa's share of global trade, continued heavy reliance on external borrowing and aid to finance development, periodic debt crises as well as continued poverty.
"Against this background, productive transformation becomes a key task for all our countries," the AU commissioner said, as he emphasized the need to differentiate new efforts from those of the past by being more innovative.
Muchanga noted that the establishment of the African Continental Free Trade Area (AfCFTA) is the first innovation the continent made. He said the free trade pact is "a huge and reliable platform for the development of regional and continental value chains."
Figures from the AU show that the development of agricultural value chains has the potential to rebalance Africa's foreign trade and thus reduce the continent's huge dependency on imports, which amount to approximately 115 billion U.S. dollars per year.
Muchanga emphasized that the development of the agribusiness industry in a regional and continental value chain approach will also contribute to feeding Africa's population and make the continent become food secure.
He, in particular, singled out Ethiopia as an example of demonstrating self-sufficiency by meeting domestic demand for wheat and having started to export wheat to neighboring countries.
"Similarly, the development of regional and continental pharmaceutical value chains can end the current situation of Africa's health marginalization," he said.
As part of promoting regional and continental value chain development, Muchanga called on African countries to work together to align their industrial policies in a coordinated manner and build specialized production hubs in specific and complementary sectors.
On the backdrop of the successful establishment of the AfCFTA, the AU commissioner said the next innovation is for all African countries to develop skills for the production of intermediate and final goods of high quality to promote the development of intra-African trade, and increased exports of manufactured goods to the rest of the world. ■