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TIPS Forum 2026: Africa’s Industrial Future in a Changing World · TIPS Podcast

• 0:04
  SPEAKER_00: Welcome to the TIPS podcast.
• 0:06
  SPEAKER_00: I'm Tobani Kaye.
• 0:07
  SPEAKER_00: In this episode, we bring you an edited recording of the closing panel from the TIPS Forum 2026.
• 0:13
  SPEAKER_00: The discussion explores what a change in geopolitical, technological, and economic environment mean for industrial policy in Africa over the coming decade.
• 0:24
  SPEAKER_00: Moderated by Noanda Masego, the panel features Neva Maketa, Faisal Ishmael, and Elvis Avinio.
• 0:30
  SPEAKER_00: We begin with Neva Macheta responding to a question about Africa's ability to shape its own development amid shifting global power relations.
• 0:39
  SPEAKER_00: How do political and economic conditions within African countries alongside the changing international order affect the industrial policies they can pursue?
• 0:51
  SPEAKER_03: So two things.
• 0:52
  SPEAKER_03: I think there's two issues though.
• 0:54
  SPEAKER_03: It's a bit of a compendium.
• 0:55
  SPEAKER_03: So there's the issue about the internal political economy and how that shapes industrial policy.
• 1:00
  SPEAKER_03: And there's the issue about the changing global order and how that affects our ability to do industrial policy the way it's mostly understood now, which is really saying do what East Asia did.
• 1:12
  SPEAKER_03: And I'd argue in both cases, part of the issue is we are absolutely very different from East Asia as a continent and specifically as South Africa, and that that's been part of the problem.
• 1:21
  SPEAKER_03: You know, that our industrial policy, I don't think anybody would say, has been as effective as we would like.
• 1:27
  SPEAKER_03: And I think that part of the reason is that we're not actually saying what do we need to do within South Africa, within the continent, that will get us to the kinds of inclusive growth we would like.
• 1:36
  SPEAKER_03: And so since I have very little time, there's two points.
• 1:40
  SPEAKER_03: The one point is in terms of the internal political economy, I think we need to really be clear that and I think he came up here before, that if you have an industrial policy that just says we're going to industrialize, without ensuring that industrialization generates jobs and higher incomes for the majority of the of the population, even in authoritarian states, that doesn't work.
• 2:00
  SPEAKER_03: That the reason industrialization became a thing in Asia was they started with light industry and they were operating in a case of full employment and people were moving into areas where they got higher pay, even if we thought they were sweatshops.
• 2:17
  SPEAKER_03: And so, you know, if you ask me why did the DTIC budget go down, part of the reason is in a democracy you can't push programs where people don't see benefits to themselves.
• 2:27
  SPEAKER_03: You know, and we've tended to act like, well, if we just industrialize the benefits automatic.
• 2:31
  SPEAKER_03: But if you're coming out of mining-based economies in particular, like much of Africa, or particularly South Africa, then industrialization may go into heavy industry, and that doesn't generate jobs.
• 2:41
  SPEAKER_03: There's not a much trickle-down effect.
• 2:43
  SPEAKER_03: So I think we need to be really careful to say how do we think about industrial policies where people actually see the benefits in a reasonable period of time.
• 2:51
  SPEAKER_03: We're not saying wait 30 years and everything will be fine.
• 2:55
  SPEAKER_03: And then on the global side, as you know, I mean, obviously, we're going back to, oh my God, who else remembers non-alignment?
• 3:01
  SPEAKER_03: I think I'm feeling very old.
• 3:06
  SPEAKER_03: I think we just have to say this is what power relations are like, you know, and then you think about how you manage power.
• 3:13
  SPEAKER_03: And I think that the breakdown in the idea of global governance, you know, the only thing worse than a rules-based order turns out to be a non-rules-based order.
• 3:23
  SPEAKER_03: And I think that's just something we we have to be realistic about.
• 3:27
  SPEAKER_04: Thanks, Stephen.
• 3:28
  SPEAKER_04: Professor Ismail.
• 3:29
  SPEAKER_04: So on sort of the question of bargaining power in particular, the AFC FDA was meant to sort of give the continent bargaining power and allow us to then get into the world stage.
• 3:43
  SPEAKER_04: But we are seeing some constraints there just in terms of you know the regression into unilateralism as well as just installing in WTO reforms.
• 3:55
  SPEAKER_04: And so, what does that mean for the continent's ability to use trade as an industrialization instrument?
• 4:03
  SPEAKER_02: Yeah, thank you so much.
• 4:04
  SPEAKER_02: Um, well, it's a great pleasure to be here.
• 4:06
  SPEAKER_02: I'm also happy to be on this platform because it's the 30th anniversary and it reminds me that I was there 30 years ago.
• 4:16
  SPEAKER_02: I was one of the co-creators of TIPS, so it survived, and it's doing extremely well.
• 4:21
  SPEAKER_02: Thank you very much, Saul, for taking this forward and really turning it into a very dynamic institution.
• 4:28
  SPEAKER_02: So I think the main thing I got from your question was what is actually happening in the world today?
• 4:36
  SPEAKER_02: And uh, you know, there was a very rich discussion.
• 4:39
  SPEAKER_02: Actually, we started the first panel, introductory remarks, set out some of the mega trends, some of the global trends, and they included, I heard, issues related to climate change.
• 4:52
  SPEAKER_02: So this is new, climate technology is a big driver of global growth and industrialization.
• 5:00
  SPEAKER_02: Some say it's the fourth or fifth industrial revolution, in addition to the digital revolution and now led by AI.
• 5:11
  SPEAKER_02: And of course, all of this is both influencing and being influenced by geoeconomics, the competition between the major powers, principally the United States and China.
• 5:24
  SPEAKER_02: I think there are at least two other important global trends.
• 5:28
  SPEAKER_02: One is demographics, which was mentioned before, but I think, and Carlos Lopez, who's a colleague of ours, keeps mentioning demographics, and increasingly I think that this is huge because it is already having huge systemic change in the north.
• 5:45
  SPEAKER_02: And for Africa, there is going to be this massive demographic dividend as our population almost doubles as we get to 2050.
• 5:54
  SPEAKER_02: So there's a fifth one, and the fifth one I think is the collapse of multilateralism.
• 6:01
  SPEAKER_02: So this is no small thing, this sort of reform and you know problems we're having in the WTO with protectionism.
• 6:08
  SPEAKER_02: This is a systemic collapse over 70 to 80 years.
• 6:12
  SPEAKER_02: We've had, you know, the creation of the GATT and the multilateral rules-based system, and all this was framed by the narrative of neoliberalism, of the inherent value of free trade.
• 6:30
  SPEAKER_02: Well, nobody believes in free trade anymore.
• 6:33
  SPEAKER_02: So this system has collapsed, and unilateralism is the order of the day, or as Neva says, power politics and the use of economic and political power to drive the markets.
• 6:46
  SPEAKER_02: Now, in Africa, all this has an impact on the continent, but in addition, we have high debt on the continent, high cost of finance, and we have the perennial issue of commodity dependence.
• 7:01
  SPEAKER_02: So, and many people talked about that, that we are really still mostly at the bottom end of global commodity value chains.
• 7:11
  SPEAKER_02: And we have seen a spectacular decline in aid last year, and then the end of preferences.
• 7:19
  SPEAKER_02: You know, OGOA is kind of just hanging in there.
• 7:21
  SPEAKER_02: We've got a few more months before we see the termination of that, and no one believes in this anymore for Africa.
• 7:28
  SPEAKER_02: So Africa is on its own.
• 7:30
  SPEAKER_02: So why I say all of this is because last year there was a lot of discussion amongst the African leaders.
• 7:36
  SPEAKER_02: I was lucky to be at at least one of the retreats or ministers held in Cairo.
• 7:42
  SPEAKER_02: And when we got to February this year, at the summit of the African Union, they made five very important decisions based on this understanding of a changing global context.
• 7:54
  SPEAKER_02: The first decision they made was that we can't depend anymore on the North.
• 8:00
  SPEAKER_02: We have to industrialize.
• 8:02
  SPEAKER_02: It is the only way for Africa to rise and increase its level of development and develop agency in building its own industrial capabilities.
• 8:15
  SPEAKER_02: And they saw this as a big opportunity.
• 8:19
  SPEAKER_02: They saw also that climate change being one of the big trends is not something that we simply respond to half-heartedly.
• 8:29
  SPEAKER_02: Neither can we, you know, pollute today and clean up tomorrow.
• 8:34
  SPEAKER_02: They said this is a window of opportunity.
• 8:36
  SPEAKER_02: And therefore, the other thing they decided was to adopt the decisions of the G20 framework on critical minerals and agreed to implement the African mining vision and the African green mineral strategy.
• 8:51
  SPEAKER_02: And they asked the AFCFTA secretariat to lead.
• 8:56
  SPEAKER_02: They also agreed that green industrialization and manufacturing must be a driver of industrialization.
• 9:03
  SPEAKER_02: They agreed to implement the African Green Industrialization Initiative, the Infrastructure Initiative, AGII, to launch that and they establish it in Cairo, the Secretariat.
• 9:19
  SPEAKER_02: And they also agreed that at the next COP, COP 32, which will be held in Africa and Ethiopia, Africa will set its own agenda and it will ensure that this will be a place for all these issues that I've just talked about to be surfaced.
• 9:36
  SPEAKER_02: So African countries are not waiting.
• 9:40
  SPEAKER_02: They see the continent as a market, but also as a space to attract investment, to have investment-led industrialization.
• 9:52
  SPEAKER_02: And we have started.
• 9:53
  SPEAKER_02: So I was lucky to be in Loma Togo on the 17th of May this year, where we had the third AFC FTA business forum, the Biashara, where we launched the first industrial value chain in the cotton, textile, apparel, and retail sector.
• 10:10
  SPEAKER_02: So the first one has been launched.
• 10:12
  SPEAKER_02: It's possible, and we've done it.
• 10:15
  SPEAKER_02: From Mauritius to Morocco, you know, the businesses have come together.
• 10:20
  SPEAKER_02: So this one's led by business, but under the umbrella of the AFCFTA.
• 10:24
  SPEAKER_02: So I'll stop there and we can talk a bit more about some of these issues.
• 10:27
  SPEAKER_02: Thank you.
• 10:28
  SPEAKER_04: Thank you.
• 10:30
  SPEAKER_04: Elvis.
• 10:31
  SPEAKER_04: I'll call you by your name.
• 10:33
  SPEAKER_04: Um so there has been quite a lot of talk on you know critical minerals and a sort of strategic importance in terms of the transition, but also in terms of Africa's ability to industrialize on the back of those uh minerals.
• 10:52
  SPEAKER_04: Drawing from that, what do you think the industrial policy conditions that need to be met for us as a continent to be able to use those minerals as part of industrialization without then, you know, just reverting back to sort of the extractivism model that has kept us reliant on exporting unbenficiated minerals.
• 11:17
  SPEAKER_01: No, thanks, Nukonda.
• 11:18
  SPEAKER_01: And thanks also for having me particularly seated between Faisal and Yua.
• 11:23
  SPEAKER_01: I think it's important for me to begin by sort of unpacking an assumption that I think is embedded in the question, right?
• 11:32
  SPEAKER_01: Because how we see and frame the opportunities for capturing and creating value, particularly in the green value chain, in the green transition, ultimately shapes the sort of industrial policy we design, but how we pursue industrial policy more broadly on the continent.
• 11:49
  SPEAKER_01: And if you've been following the general debates of CRMs and critical minerals, but also reading some of the so-called green industrial policies that majority of African countries are formulating, but also we do see some of these things happening at the continental level, you would realize from our point of view that there is a sense of optimism.
• 12:11
  SPEAKER_01: And the way I see the sense of optimism, I see it relatively as exaggerated.
• 12:17
  SPEAKER_01: And I think that we need to confront this exaggeration on these sort of platforms, but also when we are engaging with policymakers more generally.
• 12:25
  SPEAKER_01: And I think some of the discussions have already come up yesterday in the introduction, but also today during some of the paper presentations.
• 12:32
  SPEAKER_01: So I think first we need to understand and probably realize that Africa does not necessarily, at least the information we have now, we do not necessarily hold a disproportionate share of all critical minerals.
• 12:45
  SPEAKER_01: Some African countries, of course, do have some of these minerals, and some of them, DRC, South Africa, in PGMs, in manganese, in cobalt, do have some of these reserves, but also they're actually producing some of these minerals.
• 12:58
  SPEAKER_01: I think one key understanding we need to have is there is sort of a geographical concentration of these minerals, but also an evenly distributed opportunities that may be generated from these minerals.
• 13:10
  SPEAKER_01: I think that is one fundamental point.
• 13:12
  SPEAKER_01: Of course, we do know that this knowledge is driven largely by what we know of the minerals.
• 13:18
  SPEAKER_01: And we do know some of these data sets also come from the US Geological Survey, the British Geological Survey, the World Vision Data, because we have historically underinvested in geological services, right?
• 13:30
  SPEAKER_01: So, first of all, before we start even thinking about industrial policies, we need to start thinking about making investments that allow us to know what minerals we actually have on the continent before we can even start thinking about them.
• 13:41
  SPEAKER_01: I think the second point that I want to make quickly, and I think that this also comes across in a lot of African countries, but also some of the discussions have been headed by the AU is around the talk about beneficiation.
• 13:52
  SPEAKER_01: You hear beneficiation a lot in the debates, in the policy documents, but also on these sort of platforms.
• 13:59
  SPEAKER_01: But we do understand, and I think this is what came up in the discussions, is that we fundamentally lack the industrial capabilities, the infrastructure, the energy to actually do some of these things that we keep talking about.
• 14:11
  SPEAKER_01: So we need to start actually trying to put in the sort of addressing some of the structural barriers that could help us to unlock some of these potentials rather than looking at some of the objectives that we simply want to do.
• 14:23
  SPEAKER_01: Um go ahead and do.
• 14:25
  SPEAKER_01: And I think the third and most important point, which I think is also quite controversial, is the fact that many of the countries that have the minerals, in fact, beneath their soil, do not actually own these minerals.
• 14:37
  SPEAKER_01: Right?
• 14:38
  SPEAKER_01: We do know Glencore, we do know Anglo-America, we do know Badbeek, we do know first quantum, particularly in copper exploration in Zambia, for instance, actually do some, just explore some of these minerals.
• 14:49
  SPEAKER_01: They own the technologies of exploration, they actually know where the minerals are.
• 14:53
  SPEAKER_01: So we stand at risk of perpetuating their pit-to-port conversations and under a green level, right?
• 15:01
  SPEAKER_01: That is a fact.
• 15:02
  SPEAKER_01: So then how do we reverse some of these things?
• 15:04
  SPEAKER_01: I think that we need at least three, four, um, not necessarily exhaustive industrial policies.
• 15:10
  SPEAKER_01: First of all, we need to build the vertical, horizontal, and also the lateral linkages that connect both our mining activities to our manufacturing agenda.
• 15:22
  SPEAKER_01: We haven't seen that happening, and there's a lot of discussions that have been going on over several years around how we have thin linkages between these two sectors and, of course, also the wider economy.
• 15:32
  SPEAKER_01: And of course, I think in South Africa as well, you've heard a lot about the mineral energy complex.
• 15:37
  SPEAKER_01: We need to sort of try to overcome some of those issues.
• 15:40
  SPEAKER_01: But also, we need to also understand that we need to start moving beyond, say, policy coherence to something like system coherence.
• 15:47
  SPEAKER_01: We know the green transition, but also the digital transition has fundamentally transformed how we define our industrial policy.
• 15:54
  SPEAKER_01: Right?
• 15:54
  SPEAKER_01: Industrial policy definition now entails skills, it entails infrastructure, it entails energy.
• 16:00
  SPEAKER_01: So we need to be thinking around how then we sort of build a system that sort of captures all these important perspectives as part of our industrial policy.
• 16:09
  SPEAKER_01: Finally, I think this also came up quite strongly in the discussions around how then we need to start thinking regional rather than national, right?
• 16:17
  SPEAKER_01: We do know, and I've already mentioned that the minerals are scattered on the continent.
• 16:21
  SPEAKER_01: Only a few of them have it.
• 16:22
  SPEAKER_01: But also, if we check the processing plants, the smelter plants, but also their concentrator plants, they are largely in South Africa and the DLC.
• 16:31
  SPEAKER_01: So we can start talking about beneficiation in countries like Guinea, where there's literally no industrial capacity to actually beneficiate, right?
• 16:38
  SPEAKER_01: So, how then do we use regional value chain and regional linkages to try to sort of add value and create value and also try to capture some of these values?
• 16:46
  SPEAKER_01: And I do know FAZAL has done a bit of work on developmental regionalism, which also Gideon presented earlier as part of our work that we are trying to do.
• 16:54
  SPEAKER_01: I think we need to start having those discussions to actually make sure that we then see what is real and we try to move away from the exaggerations to some of the realities that can allow us then to start having the real discussions around the opportunities.
• 17:08
  SPEAKER_01: Thanks.
• 17:09
  SPEAKER_04: Thanks, Elvis.
• 17:10
  SPEAKER_04: So before I move to the room, Niva, I just want to ask something in relation to the IDS as well as some of what Elvis just said now around the creation of systems and sort of building into that, just addressing some of the constraints that we've seen to improving our industrialization prospects in the country.
• 17:29
  SPEAKER_04: Does the IDS do that?
• 17:32
  SPEAKER_04: If so, how does the IDS do that?
• 17:34
  SPEAKER_04: If it does not help us address some of those systematic issues and, you know, also address some of those constraints, what do you think needs to happen to enable?
• 17:45
  SPEAKER_04: I know this is from a South African perspective, obviously, but uh what do you think needs to happen in order for us to then be able to move towards re-industrialize a spot?
• 17:56
  SPEAKER_03: Yeah, no, I would say, look, the thing with the IDS is it has some good points in it, particularly around the need for coordination and having an actual high-level council that can try and align the departments.
• 18:08
  SPEAKER_03: I think some of the ideas around, for instance, setting up clusters, they call them in the name of SEZs, but they effectively would say, can we make the SEZs, some of these SEZ specialized clusters?
• 18:17
  SPEAKER_03: I think they at least refer to global business services as being an important thing, although they have exactly no programs to do anything about it.
• 18:24
  SPEAKER_03: And there are some other things in there that are worthwhile.
• 18:27
  SPEAKER_03: I also think there are some things in there I would be less enthusiastic about, like lower SCOM tariffs for beneficiation, which is actually reinforcing from our standpoint, reinforcing craft dependency and nothing at all about how do you ensure the pricing of the product and supports downstream manufacturing.
• 18:44
  SPEAKER_03: So I think in many ways it's to be honest, back to the future.
• 18:47
  SPEAKER_03: It's very much the kind of thing we've seen for a long time.
• 18:50
  SPEAKER_03: And I think the bigger issue for me is it is absolutely important to maintain established business, and that's their focus.
• 18:58
  SPEAKER_03: But if we don't do something about employment, I don't think that's enough by itself.
• 19:02
  SPEAKER_03: So it's necessary but not sufficient.
• 19:04
  SPEAKER_03: And it's very unclear, and it becomes really clear when you read the document, but the DTIC's core mandate is not job creation.
• 19:10
  SPEAKER_03: But then whose core mandate is job creation?
• 19:13
  SPEAKER_03: Somebody has to be responsible for it because socially, in terms of the political economy, if you don't do something to ensure that the benefits of industrialization trickle down in a visible way, then you also won't get support for those things you need to do for established business.
• 19:27
  SPEAKER_03: And I would argue that it's that balance that is lacking.
• 19:30
  SPEAKER_03: But I'm not sure it should be fixed through industrial policy, or if we need an economic development policy that's a bit more clear about how are we going to overcome these very exclusionary systems we inherited from apartheid.
• 19:41
  SPEAKER_04: Thanks, Neva.
• 19:43
  SPEAKER_04: All right.
• 19:44
  SPEAKER_04: Questions in the room.
• 19:50
  SPEAKER_06: So one of the things that makes industrialization work is finance.
• 19:56
  SPEAKER_06: We see lots of more rates being created, and then money isn't moving into other sectors.
• 20:03
  SPEAKER_06: If we look at what happened under apartheid and the conglomerates that emerged, the mining houses reinvested their things that we do in the hospital.
• 20:14
  SPEAKER_06: They reinvested their rates, they've got the battery capacity, upstream, downstream, they invested in property, they're invested in a whole range of other sectors.
• 20:25
  SPEAKER_06: And in other African countries, we've got to see those finance mechanism translating into new investments.
• 20:35
  SPEAKER_06: And we've got the investment rates alone.
• 20:37
  SPEAKER_06: We see the planet in South Africa that's at a vertical level, I think we've put it around it, and in other African countries as a problem.
• 20:46
  SPEAKER_06: So I mean it's the whole language was a comfortable bourgeoisie, extract rates, and now all multinational that do the same but don't reinvest into growing the economic development.
• 21:01
  SPEAKER_06: So if we're thinking about industrial policy, if you're thinking about African-wide strategies, what would be the view of the panel on some of these issues?
• 21:12
  SPEAKER_05: Hi, my name is Dem.
• 21:15
  SPEAKER_05: My question is directed to Alice, but I'm not 100% sure.
• 21:20
  SPEAKER_05: Some years back, perhaps uh more than a decade, South Africa was very instrumental in advancing the idea of these sort of regional corridors and the net framework which was hosted at the BBSI.
• 21:37
  SPEAKER_05: And some of that kind of persists.
• 21:40
  SPEAKER_05: I mean, there's been work on the central anomaly corridors in Tanzania.
• 21:45
  SPEAKER_05: There's work on trying to develop uh new corridors from the DRC to the West Coast and the beta corridor, and South Africa appears to be very silent in these in case.
• 22:00
  SPEAKER_05: And yet it's got a lot of productive activity that could benefit from more direct engagement with the region to kind of build these ends that people have been speaking about.
• 22:13
  SPEAKER_05: And I see a lot of commitment to this is it and in fact the sort of uh you know previously we had ideas of the corridor and landcast corridor and the rest, but not much thinking about how its own investment capabilities, its own infrastructure could be of direct benefit in terms of the region.
• 22:38
  SPEAKER_05: I mean, given some ideas of sort of regional power pool and there's some work down that as to whether or not we shouldn't sort of dig up some of that work and be much more of a partner in the region than we really have been today.
• 22:52
  SPEAKER_05: Thank you.
• 22:54
  SPEAKER_04: Space, over there.
• 22:57
  SPEAKER_05: Thank you.
• 22:58
  SPEAKER_05: Mine is to you, Mr.
• 22:59
  SPEAKER_05: Say, is there going to be a repository, like an online repository for all the presentations that have been presented to us from Mr.
• 23:08
  SPEAKER_05: Yes?
• 23:08
  SPEAKER_05: Yes.
• 23:09
  SPEAKER_04: All right.
• 23:10
  SPEAKER_04: So let me ask the question that's come from the online people.
• 23:15
  SPEAKER_04: So the entire panel can answer this one.
• 23:18
  SPEAKER_04: How can industrial policy be better integrated with innovative finance mechanisms to mobilize investment into critical minerals while ensuring a just transition for co-dependent communities?
• 23:32
  SPEAKER_04: So I'll give that to all three of you.
• 23:36
  SPEAKER_04: So was your question to anyone in particular?
• 23:40
  SPEAKER_04: All right.
• 23:41
  SPEAKER_04: Who wants to take that one?
• 23:43
  SPEAKER_04: Let's start with that one and then move to the second one and the one online.
• 23:49
  SPEAKER_03: I'm happy to make a start, but I think it would be nice if we had a discussion about it because that's surely the core of what we're trying to do here is to think about what we can do to improve industrial policy.
• 23:58
  SPEAKER_03: And I mean, I think the first thing I would say is we can't just keep ignoring the fact that the states are dysfunctional.
• 24:05
  SPEAKER_03: By dysfunctional, I mean firstly rooted in profoundly unequal and extractive economies in most cases.
• 24:10
  SPEAKER_03: It's not just South Africa.
• 24:12
  SPEAKER_03: And secondly, that you know, we have a lot of countries where democracy is not actually valued or implemented.
• 24:19
  SPEAKER_03: And we act, and I'm gonna say this now in South Africa, we've always acted as if that's not our problem, but of course it becomes our problem.
• 24:26
  SPEAKER_03: And I think we can see that with Zimbabwe in particular.
• 24:30
  SPEAKER_03: You know, that our decision that we can't actually talk about these issues, we can talk about economics, but we can't talk about politics and society to me is a problem.
• 24:38
  SPEAKER_03: I don't quite know how we should talk about it.
• 24:40
  SPEAKER_03: I will leave that up to the trade experts, but I feel like we can't just ignore it also because we also end up paying a price.
• 24:46
  SPEAKER_03: Also, by the way, Eastwat TV, all of these countries, we end up paying a price, as we know as South Africa, in terms of both the impact on their development, but also the impact on migration patterns and infrastructure and all of those things.
• 24:58
  SPEAKER_03: I also think we need to think about what we learned in South Africa about getting back to basics.
• 25:02
  SPEAKER_03: You can't run an industrial policy if your infrastructure and education aren't functional.
• 25:07
  SPEAKER_03: And I think the question is how do we align that?
• 25:09
  SPEAKER_03: And I think as Glenn said, we need to prioritize regional infrastructure, particularly more.
• 25:14
  SPEAKER_03: But I would say one of the problems is that the state-owned companies that are responsible for those things domestically are actually fundamentally not interested in doing anything internationally.
• 25:23
  SPEAKER_03: And I mean, ESCOM has always said it's riskier to bring in electricity from outside than to generate it locally, which is of course deeply ironic coming from them.
• 25:32
  SPEAKER_03: But even on transport, it's not like San Ruil has the least interest in developing cross-border votes or funding or a mandate.
• 25:38
  SPEAKER_03: And then in the region, the one thing I would say is I think we all agree we need to have we keep talking about what we need is regional value chains as the basis for regional integration, but you know, there's a problem with that, which is that requires thinking about the division of labor between countries, and that's tough.
• 25:55
  SPEAKER_03: Especially if it means South Africa would have to give up some of at least some stages of production to other countries.
• 26:02
  SPEAKER_03: And like, you know, that's the classic political economy problem where the cost to the workers and the companies in those industries can be quite high, but the benefits are quite diffuse and long term.
• 26:13
  SPEAKER_03: And so it's very, very hard for us to do that.
• 26:15
  SPEAKER_03: And I think that we need to be much more clear-eyed about what are we prepared to give up, what do we want to get regional development, and how do we manage that better.
• 26:25
  SPEAKER_01: Oh, yeah, thanks.
• 26:25
  SPEAKER_01: Thanks all.
• 26:27
  SPEAKER_01: I think there's been huge global discussion around financing and the need for us to sort of retrofit the financing architecture because it simply doesn't work, particularly for green transition and sort of the forms of industrialization that we want to pursue, uh, particularly in the global south now.
• 26:44
  SPEAKER_01: So these discussions are quite important.
• 26:46
  SPEAKER_01: And I think the question is quite important.
• 26:49
  SPEAKER_01: And I'd like how you contrasted pre-independence and post-independence.
• 26:54
  SPEAKER_01: Fundamentally, because I think these two periods sort of explored two different rent regimes in South Africa.
• 27:02
  SPEAKER_01: And with the liberalization of the mining sector at post-independence, of course, we do know fundamentally that MEs sort of captured the majority of the exploration and mining activities in the country.
• 27:14
  SPEAKER_01: And that had fundamental implications on how much rent is generated.
• 27:18
  SPEAKER_01: So I do have probably three controversial solutions.
• 27:23
  SPEAKER_01: One probably maybe that we need to start renegotiating the royalty regimes because simply the royalty regimes do not necessarily work to our benefit.
• 27:32
  SPEAKER_01: Most of the time, they are too just simply too low for us to do anything beneficial and probably industrial with it.
• 27:39
  SPEAKER_01: And of course, there are solutions around how then moving beyond even the mining sector to create multipliers, then, which goes back to the linkages conversation, to try to generate a lot more economic activities outside of mining, but of course, linked to mining rather than just simply focus on mining, because certain times maybe the finance and the jobs and the value creation may be generated from other sectors that are linked vertically, horizontally, or laterally rather than focusing on that one activity.
• 28:08
  SPEAKER_01: But I think one last one probably be that if we need, if we want more money from the mines, we should find a way of possibly having discussions around how then do we nationalize some of these mines that are quite important for our national security and growth, right?
• 28:23
  SPEAKER_01: Those conversations are quite important.
• 28:25
  SPEAKER_01: Are we ready to have those conversations?
• 28:26
  SPEAKER_01: I'm not particularly sure.
• 28:28
  SPEAKER_01: Because there are a lot of interest at play internally but also externally.
• 28:32
  SPEAKER_01: No, Glenn, thanks for that.
• 28:34
  SPEAKER_01: And I do agree, and I think there is a general sort of a consensus that we need to regionalize, and there's a lot of potential and growth potential in the fact that if we regionalize some of our industrial objectives, it could be obtained.
• 28:46
  SPEAKER_01: But I think that we do know also now we've seen a lot of transformations, particularly in global value chains, but also in regional value chains, right?
• 28:53
  SPEAKER_01: The activities around friendsharing and onsharing our activities.
• 28:56
  SPEAKER_01: And those conversations are also influencing how national governments are looking at some of these potentials and some of these opportunities.
• 29:04
  SPEAKER_01: So there is generally, and I think this is largely driven by Trump and his presidency and some other European governments, that countries are looking inward.
• 29:12
  SPEAKER_01: And to a large degree, that doesn't make sense because governments do not get votes from the region, they get votes locally.
• 29:19
  SPEAKER_01: And these guys want to be in power.
• 29:21
  SPEAKER_01: So they are finding it difficult to explain their focus regionally rather than internally.
• 29:27
  SPEAKER_01: We do know, of course, the unemployment issues have persisted, have probably increased.
• 29:32
  SPEAKER_01: We do know inequality still remains, but also we do know we even have low growth sort of statistics that's fundamentally confronting if you're focusing on South Africa, sort of more specifically.
• 29:43
  SPEAKER_01: So then explaining to the population, explaining to South Africans that there are opportunities that we could capture by investing resources in, let's say, in the growth and production of soil that is more fundamental to the poultry industry in South Africa is quite difficult, right?
• 30:04
  SPEAKER_01: Because of course that means that we are indirectly creating jobs in Zambia, whilst probably in the medium term and long term, creating even more, much more jobs.
• 30:14
  SPEAKER_01: Those conversations we need to probably try to have them, but also communicate them a lot better.
• 30:20
  SPEAKER_01: And then, of course, it then also goes back to the issues around Ubuntu and other things.
• 30:24
  SPEAKER_01: So I think that we need our policymakers to better communicate some of these things.
• 30:28
  SPEAKER_01: It's quite difficult if there are strong political interests that is fundamentally against some of these things that probably also have a lot more vocal, right?
• 30:36
  SPEAKER_01: And this particular, I'm referring, for instance, to xenophobia, right?
• 30:40
  SPEAKER_01: So these things are quite important, but they're also difficult in us governments to pursue.
• 30:46
  SPEAKER_01: And I think that the conversations around sovereignty, how we define our sovereignty and how we understand how our sovereignty is tied to the regional growth that could be obtained in the region is quite important.
• 30:56
  SPEAKER_01: But we need to find a better way of framing it and communicating it to our voters.
• 31:00
  SPEAKER_04: Prof, can you wrap that up for us, please?
• 31:02
  SPEAKER_04: And then Saul will close.
• 31:04
  SPEAKER_02: Thanks.
• 31:04
  SPEAKER_02: I'll make a few comments on three issues.
• 31:07
  SPEAKER_02: So on the question that Saul raised about um how do we guide finance to where it is needed and it is most productive, we have to bring back the developmental state.
• 31:20
  SPEAKER_02: So this is a big issue, and it's a big issue because in this country I think we've lost our sense of direction.
• 31:27
  SPEAKER_02: I remember so I started on the government in 1994, week number two, and the first minister of trade and industry, who remembers him, Trevor Manuel.
• 31:39
  SPEAKER_02: A few months later, you know, I went to a conference in Malaysia.
• 31:43
  SPEAKER_02: The conference was on the East Asian miracle, it was funded by the Japanese.
• 31:48
  SPEAKER_02: It was about the developmental state.
• 31:50
  SPEAKER_02: Well, 30 years on, we forgot about it.
• 31:53
  SPEAKER_02: It's no accident, because this year in March, I was invited to a conference in uh Nairobi, hosted by the World Bank, and the topic they asked me to speak on was industrialization and the AFCFTA.
• 32:10
  SPEAKER_02: A few weeks after that conference, they published the first report, the World Bank.
• 32:15
  SPEAKER_02: I don't know whether they've ever published such a report in the history of the World Bank, but this one was on industrialization.
• 32:22
  SPEAKER_02: So before they used to say it's a policy that we don't speak about, you know.
• 32:28
  SPEAKER_02: Now the IMF is talking about, they also put out a report on industrialization.
• 32:33
  SPEAKER_02: So for at least 30 years that I know because I was in the government, the bank and the IMF did not support industrialization.
• 32:42
  SPEAKER_02: And South Africa, unfortunately, has been influenced like many other countries by the you know the ideology and economic policy narratives of the bank and the IMF, like most other countries on the African continent, and in most other countries, as I think Elvis was alluding to, there's not much sovereignty.
• 33:04
  SPEAKER_02: It's a question of power.
• 33:05
  SPEAKER_02: So if you have high debt and your balance of payments problems, you have a challenge to engage the IMF in the bank.
• 33:11
  SPEAKER_02: So they dish out their policies and you have to support it.
• 33:14
  SPEAKER_02: But South Africa should have had a lot more sovereignty than many other countries.
• 33:19
  SPEAKER_02: They don't have that excuse.
• 33:21
  SPEAKER_02: So the problem here is one of policy.
• 33:24
  SPEAKER_02: And I think that as intellectuals and policymakers in the room, we really have to address that question.
• 33:31
  SPEAKER_02: I think that South Africa right now does not have the mentality or the attitude of a developmental state.
• 33:38
  SPEAKER_02: Now, why I raise the issue of developmental state?
• 33:40
  SPEAKER_02: Because they succeeded in guiding finance to where it was needed.
• 33:44
  SPEAKER_02: They did it.
• 33:46
  SPEAKER_02: Korea did it.
• 33:47
  SPEAKER_02: So did Taiwan.
• 33:49
  SPEAKER_02: So did so many other countries, and of course, China is the best.
• 33:54
  SPEAKER_02: Look at what they've done since 1994, 30 years ago.
• 33:57
  SPEAKER_02: Where was China?
• 33:58
  SPEAKER_02: Where are they now?
• 34:00
  SPEAKER_02: So I think we need to have this debate because right now the country doesn't have an economic development strategy and they don't have a strong developmental state.
• 34:10
  SPEAKER_02: So that's my answer.
• 34:11
  SPEAKER_02: And industrial policy cannot be done and succeed by one department.
• 34:17
  SPEAKER_02: We know that.
• 34:18
  SPEAKER_02: We've said it so many times, but we still try to do that.
• 34:22
  SPEAKER_02: So we have to do it, you know, as a whole, a government as a whole.
• 34:26
  SPEAKER_02: That means, you know, monetary policy, the Reserve Bank, you know, can guide finance.
• 34:33
  SPEAKER_02: And it can guide it also, you know, to climate finance, like green bonds.
• 34:38
  SPEAKER_02: So why I can say this now, well, firstly because I'm retired, but secondly, because everywhere in the North, they don't believe in the neoliberal ideas of the bank anymore.
• 34:52
  SPEAKER_02: And the bank itself has changed.
• 34:54
  SPEAKER_02: And industrial policy is now the centerpiece of economic policy in the north.
• 35:02
  SPEAKER_02: Of course, it's arguable whether Trump, you know, has any clear idea about industrial policy, whether he uses tariffs in the best interest of industrial policy, but they now don't believe these ideas of the neoliberal frameworks that the bank and the IMF propagated.
• 35:19
  SPEAKER_02: So I think we need to have a robust debate about that.
• 35:22
  SPEAKER_02: And that is the only way in which, at least, you know, in the apartheid state in the 1920s, 30s, it was a developmental apartheid state.
• 35:31
  SPEAKER_02: The state guided finance.
• 35:33
  SPEAKER_02: They created the IDC via the IDC, created by the apartheid state, and they use the IDC to guide finance.
• 35:41
  SPEAKER_02: So I think we need to go back and look at some of these questions.
• 35:45
  SPEAKER_02: So on the question of the corridors, you know, we created the first one, the successful one, Rachia, the Maputu Development Corridor, is really still in my mind one of the best examples of how you build a project which, you know, between several countries, and how DFIs like the IDC can lead that process.
• 36:09
  SPEAKER_02: Now, several that have taken off on the continent, like the Mombasa to Nairobi one, the Djibouti to Addis one, and now there's a lot of contestation around the Lobito corridor because of geopolitics.
• 36:24
  SPEAKER_02: It's either the Chinese and now the Americans are trying to do that.
• 36:28
  SPEAKER_02: But there is a very nice debate, I think, going on in the African Development Bank.
• 36:32
  SPEAKER_02: And this year they launched a new program called a New African Finance Architecture for Development.
• 36:40
  SPEAKER_02: And I know a little bit about it because Carlos Lopez, who's at our school, is an advisor, to the president of the AFDB.
• 36:47
  SPEAKER_02: And it's precisely this question that Saul asked that they raised, which was how do we mobilize domestic finance to support industrialization and infrastructure development on the continent?
• 36:59
  SPEAKER_02: So there are many ideas there that will address the geopolitical question because, you know, for many, most of our big projects have been funded either by China or you know by others.
• 37:11
  SPEAKER_02: And often this is not something which we have full control over.
• 37:14
  SPEAKER_02: So I think the AFTB has got something and we should be engaging with that debate.
• 37:19
  SPEAKER_02: Thank you.
• 37:20
  SPEAKER_04: Thank you.
• 37:21
  SPEAKER_04: And with that, I would say this panel is closed.
• 37:25
  SPEAKER_04: Thank you, everyone.
• 37:26
  SPEAKER_04: Round of applause, please.
• 37:31
  SPEAKER_00: Thank you for joining the Trade and Industrial Policy Strategies official podcast.
• 37:36
  SPEAKER_00: Remember, sustainable growth is not just a goal, but a path to a more resilient and prosperous future.
• 37:43
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• 37:49
  SPEAKER_00: Until next time, I'm Tobanike signing off.