Interview: Workneh Gebeyehu
How would you assess the pace of industrialisation among IGAD member states?
WORKNEH GEBEYEHU: While industrialisation among member states is relatively nascent, there is a collective understanding of the imperative to accelerate this process, boost productivity, create jobs and support economic growth. It is critical that governments continue to enact conducive macroeconomic policies and provide the requisite infrastructure to expedite this transformation. Among the challenges impeding industrial growth include high input costs for localised production, suboptimal productivity levels and undeveloped competitive advantage stemming from uneven application of global standards. Moreover, the dependence on exporting raw materials often comes at the expense of developing more diverse and profitable value chains.
To reverse this trend, member states must work with the private sector to develop and implement measures that are complemented by appropriate financial and macroeconomic policies, including regulations that enhance foreign exchange, debt management, and foreign investment. Such efforts will offer the competitive and stable exchange rate and long-term financing required to sustain industrialisation at meaningful scale.
To what extent is regional economic integration critical to fostering inclusive growth?
GEBEYEHU: Economic integration is a key component of regional development. Fundamental to this agenda is the establishment of a free trade area, investment promotion, and the development of infrastructure, ICT, tourism and agriculture. Education, health and migration are also important drivers. In addition to improving opportunities for regulated labour mobility, free movement stimulates the exchange of ideas, skills and knowledge. The IGAD Regional Trade Policy 2022-26 seeks to foster an enabling environment to promote multilateral trade between member states. The implementation of this strategy looks to remove trade distortions by establishing a system for mutual recognition, then gradual harmonisation of national standards – facilitating the movement of capital. What is your evaluation of ICT development and digitalisation among member states?
GEBEYEHU: Enabling digitalisation is a critical factor for building economic resilience and achieving sustainable development goals. To reap such benefits, member states must undertake five steps. First, improve accessibility via harmonised and holistic policies, and conducive legal and regulatory frameworks. Second, narrow the digital divide by making digital products and services affordable, especially in rural areas. Third, enhance digital literacy and skills by providing continuing education and training. Fourth, ensure content relevancy to cater to the needs of end users. Lastly, strengthen online security to mitigate cybersecurity risks. IGAD member are implementing programmes to overcome these barriers, with funding and support from the World Bank and the African Development Bank. These initiatives seek to operationalise the pillars of a digital economy and support digitalisation, with an emphasis on micro-, small- and medium-sized enterprises. Where do the main challenges lie in facilitating clean energy generation among member states?
GEBEYEHU: The subregion has sizeable, though underutilised, potential to generate solar, wind and geothermal energy. The key challenges in maximising these opportunities stem from poor energy security due to fluctuating fossil fuel prices and import shortages; insufficient sustainable energy policies; inadequate planning capacity and investment; and climate change impacts that threaten energy infrastructure. Mitigating these issues through the provision of sustainable clean energy could underpin growth in member states by promoting the development of systems to deliver social services and support economic activity.
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