Roundtable on “Developing Value Chains in North Africa” : An opportunity for the region, but with conditions

Rabat, 5 March 2014 (ECA) - Within the framework of ECA’s ICE meeting for North Africa held in Rabat, Morocco, from 4-6 March 2013, a Round Table was devoted to“Developing regional value chains to accelerate the diversification and sophistication of North African economies”.

Attended by Mr. Mahdi Ghanya, Libya’s Minister of Planning and many leading regional and international experts, the Round Table was one of the ICE highlights and an opportunity to ask the questions that matter : Why regional value chains (RVC) and for who, in which industrial segments, for what type of economy and to serve what economic prospects?

The meeting allowed participants to appreciate the opportunities that RVG can bring to their country as an economic leverage, share regional and international experiences in this area and gauge the level of effort they need to deploy in order to join the bustling dynamics of regional and international value chains.

Indeed, the emergence of North Africa countries pre-supposes a significant transformation of their economies and raises the issue of the processes that are needed to guide these structural changes.

Industrialization and export of more and more diversified products are two major levers that underpin structural transformation, but the economies of the North Africa region have not exploited the potential of these levers in a suitable manner, despite the diversification policies and strategies followed in countries like Morocco, Egypt, Algeria, etc. Yet, the region needs to create wealth and improve its growth rates in order to reduce the pressing and threatening issue of unemployment.

One solution proven in other parts of the world is the development of industry and services. Hence the urgent need for the region to accelerate the diversification of its products and couple this with developing regional value chains for a better repositioning in the global value chains .

Thanks to presentations made by various regional and international experts on current experiences in the area both in Europe and Asia, participants were able to better understand the operational mechanisms that govern these experiences and the type of dividends arising for national economies. The emphasis was placed on the means and relevance of adapting these experiences to the North African context, but also on the need for consistent industrial policies, together with complementary policies and well- equipped institutions, so as to achieve the objectives of these policies.

According to the expert of the European Commission, a study funded by the OECD on a few key industries in the region showed that North Africa was a context marked by the fragmentation of value chains and has also competitive advantages that it should use to develop value chains that are likely to lead to industrial complementarity.

Echoing the priorities for the region in terms of addressing unemployment, UNIDO expert has stated that the primary objectives of the collaborative approach to develop value chains are actually creating jobs and reducing poverty, identifying levers to generate information technology, and strengthening ownership through involving in these value chains the largest number of economic actors, including the regional private sector and foreign investors.

Insufficient mastery of all productive systems also observed in the region should be addressed through deploying greater efforts to collect and process information and make a comprehensive mapping of local production systems. Another important factor which can boost regional value chains is the proper use of the International Road Transport system (IRT), as transportation has become a vital means of production and trade.

A strong consensus has emerged from exchanges between experts and participants on the need to develop cooperation for the creation of new regional comparative advantages and the conquest of new market shares at national, regional and international levels. Such cooperation will help contribute more actively to structural transformation of North Africa economies, which has become an essential prerequisite for development.

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