Central Africa’s road to economic diversification

Countries in the Central African sub-region have declared 2021 to 2030 as a decade of economic diversification, setting their sights on transitioning from being commodity export-oriented to focusing more on manufacturing and providing high-end services. This ambitious goal was discussed in a recent interview with Jean-Luc Mastake Namagabez, a senior economist at the United Nations Economic Commission for Africa (ECA), who shed light on the challenges and opportunities facing the region. Namagabez emphasized the urgent need for action, highlighting the current vulnerabilities stemming from the reliance on exporting raw materials and the fluctuating global market prices. The region's susceptibility to economic shocks, as evidenced by the impact of oil price fluctuations on countries like Congo-Brazzaville, Chad, Gabon, and Equatorial Guinea, underscores the importance of diversifying the economy to ensure stability and sustainability. By moving away from a 'pit to port' approach of simply extracting and exporting raw materials, Central Africa can create more job opportunities through industrialization and value addition within the region. Namagabez stressed the potential of industries like timber processing to demonstrate the benefits of transforming raw materials into higher value-added products. The focus now is on translating ideas into action, with the ECA advocating for a collective effort involving the public sector, private sector, media, and local investors to drive economic growth and industrial development. Enhancing infrastructure, improving access to energy, and fostering a conducive business environment are vital steps in attracting investments and promoting resilience in the face of challenges like the COVID-19 pandemic. A key aspect highlighted by Namagabez is the need for strong leadership that can leverage the abundant opportunities in the region, such as the rich natural resources in the Congo Basin, the youthful population's entrepreneurial spirit, and the potential for green and digital economies. With vast mineral resources, arable land, and water reserves, Central Africa has the potential to diversify into various sectors like agriculture, mining, and eco-tourism. Embracing vertical and horizontal diversification strategies, and exploring new product portfolios while adding value to existing products, can lead to sustainable economic growth. Namagabez also pointed out that even oil, often seen as a hindrance to diversification, can be a source for innovation and new product development within the sector. The focus now is on implementing the right policies, creating incentives, and fostering collaboration between public and private entities to propel Central Africa towards a more diversified and resilient economy within the framework of the 'Decade of Economic Diversification.'