Africa must embrace value addition on raw material exports

By Geoffrey Mutegeki

African countries including Uganda export raw materials that have been subjected to zero or minimal value addition process, products like coffee, cocoa, iron ore, and crude oil among others.

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The Vice President of Ghana, Muhamudu Bawumai, has called on African countries to reduce excessive exportation of raw materials if they are to reduce poverty and realise economic development.

Bawumia made the call during his address as guest of honor at the inaugural session of the 14th CII-EXIM Bank Conclave on India-Africa Project Partnerships in New Delhi, India on March 17.

 “We must learn to add value to our products like our Indian friends if we want to get rich. As Africa and Ghana in particular we cannot continue exporting raw materials if we are developing our nations,” Bamuwai said.

African countries including Uganda export raw materials that have been subjected to zero or minimal value addition process, products like coffee, cocoa, iron ore, and crude oil among others.

“Value addition calls us to work on improving on industrialisation and manufacturing sector so that we process our products before exporting,” Bamuwai said.

In contrast to African countries rich countries that import African raw materials add value to these products and export them back to Africa at a high price.

According to Bamuwai industrialisation for value addition will not only earn a country increased foreign exchange but also lead to creation of jobs and skills development.

He noted that establishment of local processing industries will help to combat unemployment and  poverty.

Bumuwai urges that since India has a lot of experience in industrialisation, he believe that the nation can help us fulfill Africa’s dream of industrialising.

“There must be a commodity to which you can add value –small or large. In agro-processing for example, we are encouraging the private sector to come in and set factories and giving them incentives for the same,” Bamuwai said.

Lesotho's Deputy Prime Minister Monyane Moleleki noted that Africa cannot rely on its raw materials without value addition.

“We are rich in natural resources but we are still poor, we need to act now and join hands with forces like India that are willing to help us develop,” Moleleki said.

He noted that with win-win development partnerships India-Africa relations will continue to flourish.

The Minister of Commerce and Industry, Suresh Prabhu, urged that African resources should be processed in Africa if African states are to meaningfully gain from them.

“African natural resources should be processed in Africa. Instead of exporting them raw we ask our business people  there and work with the Africans,” Prabhu said.

According to Uganda Development Corporation, Uganda mainly exports raw or low value agricultural products to India with zero or minimal value addition.

Whereas India exports high value commodities to Uganda like mineral fuels and distillation products, Pharmaceuticals, machinery, automobiles among others.

The Conclave is being organised by the Confederation of Indian Industry (CII) and EXIM Bank of India in collaboration with the Ministry of External Affairs and the Ministry of Commerce & Industry.

More than 31 ministers from 21 African countries and business delegates from 37 countries are in attendance.

Running for three days from March 17-19, the event has attracted about 500 delegates from Africa and 400 from India.

This annual event, since its inception in 2005, brings senior Ministers, policy makers, officials, business leaders, bankers, technologists, start-up entrepreneurs and other professionals from India and Africa on a common platform in a spirit of partnership.

Guinea's Prime Minister Ibrahima Kassory Fofana also attended.

The 14t edition of the conclave is focusing on the bilateral initiatives needed to bolster the India-Africa economic engagements and project partnerships.