Benchmarking Industrial Competitiveness in Africa
34
Benchmarking Industrial Competitiveness in Africa The CIP 2020 Report 1 UNIDO Statistics Division 16 November 2020
Transcript of Benchmarking Industrial Competitiveness in Africa
Benchmarking Industrial Competitiveness in Africa
The CIP 2020 Report
1
UNIDO Statistics Division
16 November 2020
CONTENTS
1. Introduction
2. Industrial competitiveness in Africa
2.1. Background and recent trends
2.2. The Competitive Industrial Performance (CIP) index
2.3. Data availability
2.4. Brief summary
3. Case study: Kenya
2 / 35
INTRODUCTION
1 2 3
4 / 35
What do we mean by “industrial competitiveness”?
Why is industrial performance important?
Is industrialization important for African countries?
1 2 3
5 / 35
What do we mean by “industrial competitiveness”?
The capacity of countries to increase their presence in
international and domestic markets while developing
industrial sectors and activities with higher value
added and technological content
(UNIDO CIP Report 2013)
1 2 3
6 / 35
Why is industrial performance important?• Historically, an economic transition towards
manufacturing enabled accelerated economic growth
• Structural transformation is still considered the main engine of sustained growth in developing countries
• A solid industrial base is the foundation of stable and resistant economies
1 2 3
7 / 35
Is industrialization important for African countries?• Essential factor to accelerate growth and higher
level of sustainable development• Acknowledgement in development frameworks
o Third industrial development decade for Africao 2030 Agenda for Sustainable Developmento The Programme of Action for the Least
Developed Countries for the Decade 2011-2020o The African Union’s Agenda 2063
INDUSTRIAL COMPETITIVENESS IN AFRICA
2.1. Background and recent trends
1 2 3
9 / 35
Africa represents
world population
world GDP
global manufacturing value added
17.0%
2.8%
1.6%
1 2 3
10 / 35
World Africa
GDP per capita(2015 USD) 10 858 1 954
Manufacturing value added per capita (2015 USD) 1 796 208
1 2 3
11 / 35
Sour
ce:
http
://s
tat.u
nido
.org
10
12
14
16
2012 2013 2014 2015 2016 2017 2018 2019
Shar
e of
MVA
in G
DP (i
n pe
rcen
t)
Africa
World
Recent trends point to a widening gap…
1 2 3
12 / 35
Sour
ce: O
wn
elab
orat
ion
on th
e ba
sis o
f UN
CTAD
stat
(202
0).
…and a persistent deficit in manufacturing trade
0
100
200
300
400
500
2012 2014 2016 2018Man
ufac
turin
g tra
de (i
n bi
llion
s cu
rren
t US
dolla
rs)
Manufactured exports Manufactured imports
1 2 3
13 / 35
Sour
ce: O
wn
elab
orat
ion
on th
e ba
sis o
f UN
CTAD
stat
(202
0).
In fact, African share in world exports is falling for almost all products
Technology group 2012 2013 2014 2015 2016 2017 2018 2019
Primary products 11.7 10.5 9.9 8.8 8.2 8.9 9.0 8.8
Total manufacturing 1.4 1.4 1.4 1.2 1.2 1.2 1.3 1.3
Resource based 3.3 3.1 3.3 2.9 2.8 2.9 2.9 3.0
Low technology 1.2 1.1 1.1 1.0 1.1 1.1 1.1 1.0
Medium technology 1.0 1.0 1.0 1.0 1.0 1.0 1.1 1.1
High technology 0.3 0.2 0.3 0.2 0.2 0.2 0.2 0.2
Total exports 3.5 3.2 3.0 2.4 2.3 2.5 2.6 2.5
1 2 3
14 / 35
Sour
ce: O
wn
elab
orat
ion
on th
e ba
sis o
f UN
CTAD
stat
(202
0).
The continent has a competitive advantage on declining markets
Primary products
Total manuf
Resource based manuf
Low techMedium tech
High tech
-4.0
-3.0
-2.0
-1.0
-
1.0
2.0
3.0
4.0
-2.5 -2.0 -1.5 -1.0 -0.5 - 0.5 1.0 1.5
Annu
al g
row
th o
f wor
ld d
eman
d, 2
012-
19(in
diff
eren
ces t
o th
e w
orld
ave
rage
)
Comparative advantage/disadvantage (ln(RCA))
High growth & comparativeadvantage
High growth &comparative disadvantage
Low growth & comparativedisadvantage
Low growth & comparative
advantage
2.2 The CIP Index in Africa
But how is the continent performing in terms of
industrial competitiveness? How can we measure it?
1 2 3
15 / 35
The Competitiveness Industrial Performance (CIP) index
1 2 3
16 / 35
1 2 3
Source: http://stat.unido.org
17 / 35
The CIP 2020 examines the industrial competitiveness of 152 economies. The top performers in Africa:
CIP African ranking Economy Region CIP global
rankingDim.1 (rank)
Dim.2 (rank)
Dim.3 (rank)
1 South Africa Southern Africa 52 70 58 39
2 Morocco Northern Africa 61 84 32 53
3 Egypt Northern Africa 64 105 56 46
4 Tunisia Northern Africa 67 72 38 70
5 Eswatini Southern Africa 83 57 39 113
6 Mauritius Eastern Africa 87 60 89 110
10 Nigeria Western Africa 99 134 86 63
11 Congo Middle Africa 101 98 90 102
1 2 3
Source: http://stat.unido.org
18 / 35
The complete African rankingEconomy Region CIP
(rank)D1
(rank)D2
(rank)D3
(rank) Economy Region CIP (rank)
D1 (rank)
D2 (rank)
D3 (rank)
South Africa Southern Africa 52 70 58 39 Cameroon Middle Africa 121 130 126 101Morocco Northern Africa 61 84 32 53 U.R. of Tanzania Eastern Africa 123 137 111 94Egypt Northern Africa 64 105 56 46 Zimbabwe Eastern Africa 124 129 116 115Tunisia Northern Africa 67 72 38 70 Zambia Eastern Africa 125 131 134 112Eswatini Southern Africa 83 57 39 113 Uganda Eastern Africa 128 139 127 111Mauritius Eastern Africa 87 60 89 110 Mozambique Eastern Africa 132 138 136 119Botswana Southern Africa 89 65 118 100 Central African Rep. Middle Africa 133 136 34 138Namibia Southern Africa 97 76 123 109 Ethiopia Eastern Africa 134 146 113 104Algeria Northern Africa 98 115 147 69 Cabo Verde Western Africa 136 122 88 146Nigeria Western Africa 99 134 86 63 Madagascar Eastern Africa 137 141 145 124Congo Middle Africa 101 98 90 102 Rwanda Eastern Africa 142 142 141 135Côte d'Ivoire Western Africa 105 119 109 88 Malawi Eastern Africa 143 147 125 137Senegal Western Africa 106 118 71 97 Burundi Eastern Africa 145 148 135 143Angola Middle Africa 107 120 132 82 Gambia Western Africa 148 149 131 151Gabon Middle Africa 110 83 146 117 Eritrea Eastern Africa 149 152 142 149Ghana Western Africa 114 127 140 92 Niger Western Africa 151 151 104 131Kenya Eastern Africa 115 132 115 89
1 2 3
19 / 35
Average CIP ranks by subregionEastern Africa
Middle Africa
Northern Africa
Southern Africa
Western Africa Africa
CIP 130 114 73 80 123 113 Dimension 1 134 113 94 67 131 117 Manuf. VA per capita 135 118 97 82 127 120 Manuf. exports per capita 132 109 90 61 130 114 Dimension 2 125 106 68 85 104 106 Industrialization intensity 125 112 74 86 95 106 Export quality 118 83 69 81 105 99 Dimension 3 119 108 60 90 110 105 Impact, world manuf. exports 122 110 60 81 116 106 Impact, world manuf. VA 114 108 59 100 103 102
VA = value added. Source: http://stat.unido.org
2.3 Data availability
• CIP 2020 available for 33 African economies:
o 4 with complete data
o 29 with at least one variable imputed
• For the rest of the economies, not enough data are
available to calculate the CIP
• This limits the evidence base for monitoring
industrial development and evaluating policy
1 2 3
20 / 35
2.4 Brief summary
• In terms of competitive performance, UNIDO’s CIP indicates that African industry is lagging behind other developing regions of the world
• Economies in Southern and Northern Africa performing relatively better
• Limited data availability is an obstacle to providing the evidence base required
• Performance indicators, such as the CIP, as crucial to monitor developments and guide policy
21 / 35
1 32
CASE STUDY: KENYA
23 / 35
3. Case study: KenyaWe have chosen 3 country comparators: Côte d'Ivoire, Ethiopia and Sri Lanka. Why?
• Ethiopia: Border country. Resource based. Similar GDP, MVA and share of MVA in GDP. Lower GDP per capita and MVA per capita.
• Côte d'Ivoire: African country. Resource based. Similar GDP per capita. Higher MVA per capita and higher share of MVA in GDP.
• Sri Lanka: Asian Economy. Resource based. World leader in the production of tea, as Kenya. Higher GDP per capita and MVA per capita.
1 2 3
24 / 35
3. Case study: KenyaCountry comparison: General statistics
EconomyGDP (billions)
GDP annual growth rate (1990-2019, %)
MVA (billions)
MVA annual growth rate (1990-2019, %)
Population (millions)
GDP per capita (dollars)
MVA per capita (dollars)
Share of MVA in GDP (%)
Côte d'Ivoire 44,5 3,4 6,0 3,2 25,7 1.729,5 235,2 13,6
Ethiopia 87,2 6,9 6,5 8,5 112,1 778,4 57,8 7,4
Kenya 79,8 3,9 6,7 2,5 52,6 1.517,8 126,6 8,3
Sri Lanka 92,2 5,1 15,0 5,2 21,3 4.325,0 705,4 16,3
Source: http://stat.unido.org
1 2 3
25 / 35
3. Case study: KenyaCountry comparison: The CIP index and its dimensions
Source: http://stat.unido.org
Region Southern Asia Western Africa Eastern Africa Eastern AfricaEconomy Sri Lanka Côte d'Ivoire Kenya EthiopiaCIP (rank) 75 105 115 134Dimension 1 (rank) 87 119 132 146Dimension 2 (rank) 79 109 115 113Dimension 3 (rank) 65 88 89 104Manufacturing value added per capita (rank) 78 118 131 143Manufacturing export per capita (rank) 95 119 132 146Industrialization intensity (rank) 83 82 116 110Export quality (rank) 87 129 111 106
Impact on world manufacturing exports (rank) 74 93 102 128
Impact on world manufacturing value added (rank) 60 83 79 81
1 2 3
26 / 35
3. Case study: KenyaThe evolution of the CIP indexes
Source: http://stat.unido.org
115
75
105
134
1 2 3
27 / 35
3. Case study: KenyaCapacity to produce: Share of MVA in GDP
Source: http://stat.unido.org
Kenya Sri Lanka
Côte d'Ivoire Ethiopia
2006 2008 2010 2012 2014 2016 2018 2006 2008 2010 2012 2014 2016 2018
0
5
10
15
20
0
5
10
15
20
Shar
e of
MVA
in G
DP (i
n pe
rcen
t)
1 2 3
28 / 35
3. Case study: KenyaCapacity to produce: Manufacturing value added per capita
Source: http://stat.unido.org
0
200
400
600
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
MVA
per
cap
ita (i
n co
nsta
nt 2
015
USD)
Côte d'Ivoire
Ethiopia
Kenya
Sri Lanka
1 2 3
29 / 35
3. Case study: KenyaCapacity to export: Share of manufactures in total exports
Source: http://stat.unido.org
1 2 3
30 / 35
3. Case study: KenyaCapacity to export: Manufacturing exports per capita
Source: http://stat.unido.org
1 2 3
31 / 35
3. Case study: KenyaTechnological deepening and upgrading: Structure of exports (%)
Source: http://stat.unido.org
Technology groupCôte d'Ivoire Ethiopia Kenya Sri Lanka2005 2018 2005 2018 2005 2018 2005 2018
Primary products 44,8 66,5 85,5 71,7 40,8 56,5 22,8 23,1
Total manufacturing 54,5 25,3 9,2 23,3 58,1 42,0 75,1 76,3
Resource based 31,9 16,1 5,1 3,4 32,7 18,0 16,0 17,7
Low technology 2,7 3,3 4,0 10,1 16,7 15,0 53,2 50,5
Medium technology 11,4 5,5 0,1 6,6 7,2 6,7 2,9 6,7
High technology 8,4 0,5 0,1 3,1 1,6 2,3 3,0 1,3
Other transactions 0,8 8,2 5,3 5,0 1,1 1,5 2,1 0,7
Total exports 100 100 100 100 100 100 100 100
1 2 3
32 / 35
3. Case study: KenyaKenya’s export market shares in world exports (%)
Source: http://stat.unido.org
Technology groupCôte d'Ivoire Ethiopia Kenya Sri Lanka2005 2018 2005 2018 2005 2018 2005 2018
Primary products 0,20 0,30 0,05 0,06 0,09 0,12 0,09 0,10
Total manufacturing 0,05 0,02 0,00 0,00 0,03 0,02 0,06 0,06
Resource based 0,15 0,06 0,00 0,00 0,07 0,03 0,06 0,07
Low technology 0,01 0,02 0,00 0,01 0,04 0,03 0,23 0,23
Medium technology 0,03 0,01 0,00 0,00 0,01 0,01 0,01 0,01
High technology 0,04 0,00 0,00 0,00 0,00 0,00 0,01 0,00
Other transactions 0,01 0,09 0,01 0,01 0,01 0,01 0,02 0,01
Total exports 0,07 0,07 0,01 0,01 0,03 0,03 0,06 0,06
1 2 3
Concluding remarks
1 2 3
33 / 35
• The 2020 CIP ranking ranks Kenya in the last quarter of the CIP global ranking, in the place 115th out of 152 economies. The analysis has revealed some difficulties in its production and export capacity and a deterioration of their technological capabilities
• CIP index indicates that Kenya is closing up the gap in industrial competitiveness with its follower, Ethiopia, but expanding it with the other front-running comparators Côte d'Ivoire and Sri Lanka.
• Further research would be needed to fully study the competiveness in Kenya. Sectoral MVA data would be necessary for all countries studied plus a more micro analysis on trade at product level would surely be an improvement.
Benchmarking Industrial Competitiveness in Africa
The CIP 2020 Report
34
UNIDO, Statistics Division
Fernando Cantu, [email protected] Todorov, [email protected]
