Structural Economic Transformation throughEconomic Diversification and Industrialization inAfrica
Public Symposium
30 June 2016

UNIDO’s Strategy for Industrialization based on
SDGs and Partnerships
Opportunities and comparative advantages for theJapanese Private Sector
30 June 2016

How do we achieve Structural Economic Change
through Industrialization in practice?
• SDG 9: New opportunity to put Industrialization at the Centreof the developmental agenda• SDG 9: “ Build resilient infrastructure, promote inclusive andsustainable industrialization and foster innovation”• Inclusive and Sustainable Industrial Development (ISID)• Inclusiveness: Rural areas, SMEs, Women, Youth, balanced
development, etc.
• Sustainability: Energy, Environment• PARTNERSHIP

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Development and expansion of UNIDO’s partnership
Approach“To achieve inclusive andsustainable industrial development
for our member states (…) we needto develop stronger partnerships tomake our development impact evenbigger. This means further
expanding strategic partnerships”

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WHY PARTNERSHIP?
Context
Lima Declaration: ISID
SDGs: The proposed goal 9
DFIs' positive stance on supporting industrial development
NGOs and Private sector's growing interest in joining forces fordevelopment• Emergence of South-South development cooperation as complementary
to the traditional North-South• SDG 17: Revitalize global partnerships for sustainable development••••

WHY PARTNERSHIP? (2)• Improving both internal and external coordination onpartnerships with DFIs , NGOs and the private sector tomaximize development impact• Increasing the impact and visibility of traditional TechnicalAssistance• Scaling-up success stories on development partnerships• Mobilizing Public and Private Investment for Africa’sIndustrialization• Through the Programme for Country Partnership framework,UNIDO is proactively identifying new partners and supportingthe coordination of multi- stakeholder partnerships that cancontribute to ISID

The PCP as a framework to implement ISID andaccelerate Africa’s Industrialization
UNIDO PCP features:
1. Strong country ownership;
2. Operationalize National Industrial Strategies;
3. Closely embedded in national resource mobilization
strategies and amenable to partnerships to upscale TCservices;
4. Offering an opportunity to deploy a multi-disciplinary arrayof UNIDO services in a coordinated and synchronized way;
5. Fitted with a rigorous monitoring and reporting mechanism
so that our Member States and Partners can measure theconcrete benefits of this new approach.

Piloting the PCPs in Africa: Ethiopia and Senegal• The rich diversity of experiences amongst pilot PCPs helps
develop a robust understanding of the PCP approach indifferent contexts:– Ethiopia and Senegal, both LDCs, share a strong reliance on
the agro-processing sector and the wish to develop agroprocessing facilities;– Ethiopia sees a stronger role of the public sector in theeconomic space, while Senegal shows a vibrant privatesector.

CImplementing the PCPs in Africa: Ethiopia and Senegal• UNIDO PCP implementation: addressing industrialization in aglobal manner Improvement of Business Environment
 Industrial Strategy
 Investment Promotion
 Capacity Building of Human resources Infrastructure Private Sector Development
 Trade Capacity Building Innovation
 Energy
 Environment• Development of an impact-based M&E framework
9Coordination and partnerships• UNIDO as the main advisor on ISID to the Governments of Ethiopiaand Senegal• Government ownership and PCP visibility at the highest level National Steering Committees composed of high-level officials from the President’s Office,the Prime Minister’s Office, Ministry of Industry and the private sector
 Government annual funding secured
 A change of mindset towards industrialization now at the centre of the Government’sdevelopment agenda• Strong participation of national private sector

 UNIDO organized PCP awareness workshops for the national private sector, which led to achange of mindset
 Growing interest for private investment and private funding• Growing interest of the international private sector and foreign investors

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Partnerships and Innovative financing mechanisms• Rationalization of financial resource allocation and innovative financial
mechanisms for Industrialization: Partner and Donor Working Group &mechanisms
 Coordinate business and development partners interventions and investments for industrial
component of the PSE and promote membership of new partners
 Propose financing tools and mechanisms to mobilize additional funding and investment
 Mobilize public and private investment• Funds Mobilization Strategy, Pledging meetings and Partner and Donor
RoundtableObjective: Financing of PCPs through pledging – Result of partner engagement process
Mapping of partner interventions and financial gap analysis
Presentation of PCP technical assistance and investment project portfolio
Reinforce synergies between PCP components and partner interventions
PDWG operational and alignment with partner programmes

11Partnerships and Innovative financing
mechanisms (2)• Bilateral and Multilateral Technical and Financial
partners mobilized through constant engagement• All new UNIDO agreements with AfDB, World Bank,EIB and IsDB include the PCP• Technical and financial partners recognize UNIDO asa key actor for industrialization in Ethiopia andSenegal
12Key achievements and leveraging effect (1)• Pre-investment services and recommendations provided for
integrated industrial parks (IIPs):

 Master plan for the development of IIPs including: Incentive regime for firms and investors
 Benchmarking analysis vis-à-vis its competitors
 Cost-benefit model & economic and financial analyses transferred to National
authorities
 Review of legal, regulatory and institutional frameworks related to IIPs
 Development and design of PPP management structure and capacity-building ofrelevant national counterparts• UNIDO interventions triggered: Mobilization of USD 90 million in Senegal and USD 400 of public financing forindustrial Parks
 Definition of the IIP concept and its positioning in comparison with other countries Growing interest from partners such as AfDB, EIB and IDB
 Private sector FDI13

Key achievements and leveraging effect (2)• Industrial policy Objective: Provide government and the Private sector with implementation andmonitoring tools
 Identification of competitive labour-intensive sectors based on country’s
comparative advantage to achieve quick wins, using targeted investment promotion,incentives, and developing sustainable industrial infrastructure (GIFIUD)
 Staff of relevant ministries and institutions trained on industrial strategy design andimplementation• Agro-poles:

A comprehensive value chain analysis of the agro-industrial sector, followed by opportunity
studies (collection of baseline data related to the development of agro-poles, including abusiness plan) Concept of agro-poles defined (including composition, service provision andstakeholder involvement) Close collaboration between UNIDO and all donors & non-traditional partners
expected to participate in the governance of the agro-poles
 Master plan for agro-poles developed and implementation to start as early as 2016
 Partner interest triggered (e.g. IDB)
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How does the PCP-SEN generate inclusiveness?
• Agro-poles and rural development

 Local governance structures for agro-poles management Linkages between large-scale companies and rural SMEs
 Enhanced capacities of women and youth trough skills training and rural
entrepreneurship• SME regional industrial hub Creation of industrial activities in remote areas/decentralization
 Local SMEs linked with international supply chains of mining companies Attracting international private sector and foreign investors• Focus on small and medium-sized industries

 Local SME development, taking into account existing enterprises and access to finance• Local cluster development programme & youth and women
entrepreneurship and employment

 Clustering of local private sector in agro-poles, industrial parks and industrial mining hub• Supplier development with FDI/UNIDO’s SPX and investment
monitoring programmes

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Results: How is the issue of sustainability addressed?
• All PCP vertical interventions are supported by environment and energy
cross-cutting components
 Resource efficiency and cleaner production assessment
 Energy efficiency and resource efficiency technologies and services
 Greening of targeted value chains• Sustainable Cities Programme in Senegal Partnership with GEF, WB and GoS
 Objective: Senegal as a green cities model for West Africa• Integrated approach: pilot on sustainability and resilience for food securityin Senegal Partnerships with IFAD and GoS
 Objective: Increased sustainability and resilience of agricultural value chains for enhanced
food security• GEF integrated project on e-waste management• Engagement with Climate Technology Centre and Network (CTCN) andPartnership for Action on Green Economy (PAGE)

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Challenge: How to disseminate the PCP model inAfrica?
• Build strong partnership with the Africa Union, NEPAD and theRECs (ECOWAS, EAC, COMESA, SADC, ECCAS, etc.)• Mainstream PCP approach in Accelerated Industrial
Development of Africa (AIDA) plan of action• Build strong multi-stakeholder partnerships at continental andRegional level

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PCPs: Mobilizing the Japanese Private Sector (1)Rationale:– UNIDO Africa Investor Survey showed empirical evidence
that Japanese companies operating in Africa are amongst
the most efficient, impact-oriented and profitable FDIs but
not enough Japanese companies compared to other FDIs
– Japanese companies can bring to Africa: technology, knowhow (Energy, Environment, Agriculture, etc.), experience inindustrialization, industrial culture– Africa: New economic frontier and looking for investment
and technology– Scope for Win-Win partnership
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PCPs: Mobilizing the Japanese Private Sector (2)• Mechanisms:– Availability of information on business and investment opportunities (ISID
Platform, Investment Monitoring Programme)– Partner, including Foreign Investors, coordination mechanisms and information– Pre-investment services and recommendations available– Hand-holding of Japanese companies through Capacity Building and Advisory
Services to institutions in charge of promoting investment: Japan window– Major Investment Promotion Events:• ETH: 1st International Agro-Industry Investment Promotion Forum, 2-3 October
2016, Addis Ababa, Ethiopia• SEN: 5th UNIDO ISID Forum and Industrial Investment Promotion Event, 14-15
November 2016, Dakar, Senegal– TICAD VI (August 2016): Side Event on PPPs that will propose measures for agreater involvement of Japanese companies in the industrialization process inAfrica – Japanese companies to participate– Role of ITPO Tokyo as entry point
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Mobilizing the Japanese Private Sector: The wayforward– Time to act:
– Build strategic partnership between Japanese institutions and Africaninstitutions with UNIDO as facilitator– TICAD VI: SIDE EVENT SHOULD PAVE THE WAY TOWARDS AN EFFECTIVE
FORMALIZATION TO PROMOTE PARTNERSHIP BETWEEN JAPANESE COMPANIESAND AFRICAN INSTITUTIONS FOR AFRICA’S INDUSTRIALIZATION – UNIDO
would like to propose to AUC, NEPAD and Japan• Definition of activities;• Definition of involved Partners;• Definition of responsibilities;• Definition of Monitoring and Evaluation mechanisms.
- Pilot implementation of this strategic partnership in PCP counties or inEAC, ECOWAS or SADC
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Thank you!
30 June 2016