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Sustainable, inclusive manufacturing needed in Africa

13th April 2021

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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Africa needs sustainable and inclusive manufacturing to bolster economic growth and create jobs and now is an opportune time for this to mitigate the impact of the pandemic and capitalise on opportunities afforded by the African Continental Free Trade Area (AfCFTA).

This was indicated by speakers during a ‘Manufacturing in Africa for Africa’ roundtable, held on April 13.

Speakers also highlighted the need for innovative approaches, and the mobilisation of private capital and expertise in pursuing a green transition on the continent.  

The webinar was hosted by the Portuguese Embassy in South Africa and finance institution the European Investment Bank’s (EIB’s) regional representation for Southern Africa and the Indian Ocean, in collaboration with the South African Institute of International Affairs.

Portugal Secretary of State for Foreign Affairs and Cooperation Francisco André highlighted that Africa carried very little responsibility for global greenhouse-gas emissions, yet, it was the most adversely affected by the impacts of climate change and, therefore, it was imperative that this unfair balance be corrected.

He emphasised that the continent’s green transition must be supported by all stakeholders, with green and sustainable developments engendering both environmental and economic benefits.

EU Delegation to South Africa head Riina Kionka emphasised that European Union- (EU-) South African strategic partnerships involved powerful tools to help spur development.

She highlighted that the EU was the country’s most important trade and cooperation partner, with exports from South Africa to the EU reaching over R350-billion in 2019.

Moreover, there were over 1 000 EU companies active in the country, with these creating important skillsets in the country as well as benefits for previously disadvantaged group, she said.

She also cited the South African Reserve Bank’s figure of 40% of all foreign direct investment (FDI) in Africa coming from the EU.

Kionka indicated that there had been recent investment in areas such as renewable energy and water efficiency, which was further boosting foreign direct investment spend.

Kionka noted that the EU’s budget support for South Africa was currently being analysed to discern how to support innovative approaches to green issues and jobs.

She highlighted that EU players had produced over 60 000 high-value green innovations since the early 2000s.  

From South Africa’s side, she noted that the EU benefits from its reputable research institutions, with various collaborations across research programmes.

Kionka emphasised that there was great value in maintaining and deepening bilateral relationships between the EU and South Africa in the areas of Fourth Industrial Revolution jobs and climate actions.

In terms of green financing, she mentioned that the EU was taking steps to develop a rulebook for sustainable financing, putting forward green bond standards and it would present detailed rules to help private financers in this regard.

She also noted that the EU Battery Alliance is building new factories to power at least six-million electric vehicles (EVs) by 2025, with the battery market expected to grow considerably.

She noted that the EU was financing organisations such as GreenCape, the Council for Scientific and Industrial Research, and South African small, medium-sized and microenterprises (SMMEs) and exporters to explore how to collaboratively build the global value chain for batteries, green hydrogen and circular economy products.

She also mentioned that, during the first part of the pandemic, the EU partnered with GreenCape and local private investors to mobilise the Green Outcomes Fund.

The fund was set up by South Africa’s National Treasury before the pandemic and Kionka said it was useful in channelling emergency support to green SMMEs during the pandemic, with local beneficiaries indicating that it enabled them to stay afloat, as well as create jobs in response to new demand for green goods and services.

Kionka emphasised that now was the time to use EU-South African strategic partnerships to their fullest, as it could drive development and businesses, create sustainable jobs, transfer skills and enable a just and green economy.

EIB Sustainable and Circular Industries specialist Darragh Mac Neill highlighted the bank’s history of climate change action, and noted that it was aiming to enhance this, with the ambition to grow its investment portfolio in climate action and sustainability to 50%.

He noted that sectors such as the steel sector were going through a transformation process to focus on climate action and sustainability, with efforts being made around climate action, climate change mitigation, renewable energy and climate change adaption.

In the future, he said, the bank would be adding an environmental sustainability focus area, to allow it to capture more areas around water and resources, the transition to a circular economy and pollution prevention and protection.

Therefore, Mac Neill said there would be a more balanced focus between climate action and environmental sustainability in the future.

He noted that businesses were looking to explore the opportunities within the circular economy, with the textiles sector as one that was seeing a lot of activity in this space, reflecting pressure to regulate and manage textile waste flows.

He also noted that the steel and automotive sectors were considering recycling automotive components and putting these back into the value chain.

United Nations Industrial Development Organisation Department of Environment Industrial Resource Efficiency deputy director Nilgün Tas noted that for the AfCFTA to yield benefits, African manufacturing must be expanded and become more competitive, regionally and globally.

She said that Africa must continue to pursue diversification, value addition, activity increases in manufacturing, promotion of widespread innovation and the adoption of green technology.

The latter, she noted, would support green jobs as well as skills development, including in digital technology.

She indicated that this must be pursued while ensuring environmental sustainability and inclusivity.

Tas noted that focusing on energy efficiency alone was not enough, as other climate change impacts were embedded in the products and services people consume.

Therefore, there is a need to promote a circular economy, with this to be done in a just transition, as a means to inclusive and sustainable development on the continent, she highlighted.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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