A Compact for Industrialisation: The Role of the Private Sector in Advancing SADC’s Industrialisation Agenda

Originally written: 8 August 2025

Positioning the Private Sector in Regional Value Chains

The Southern African Development Community (SADC) Industrialisation Strategy and Roadmap (2015–2063) identifies regional value chains (RVCs) as the focal point for industrial transformation. These chains offer a pathway for expanding production possibilities, enhancing cross-border utilisation of natural and human resources, and deepening regional integration. Within this framework, the private sector is not a peripheral actor—it is a strategic driver of inclusive industrialisation.

Understanding Regional Value Chains in SADC

RVCs refer to the coordinated distribution of production activities across borders, enabling countries to specialise in specific functions based on their comparative advantage. This model promotes regional industrial integration, drives value addition, and expands participation in higher-value segments of both continental and global markets.

In the SADC context, RVCs span the full spectrum of economic activity from upstream processes such as raw material extraction to downstream activities including manufacturing, logistics, and services. The 2015 SADC Industrialisation Strategy and Roadmap identifies three mutually reinforcing growth pathways:

• Agro-processing
• Minerals beneficiation
• Industry and service-driven value chains

These sectors are prioritised for their potential to create employment, diversify exports, and enable industrial upgrading (SADC, 2015). Recent updates under SADC’s 2025 Corporate Plan and AfCFTA’s Economic Report on Africa (2025) have expanded the list of priority sectors to include:

• Pharmaceuticals – strengthening regional health security and reducing import dependency
• Automotive – promoting industrial upgrading and regional manufacturing integration
• Renewable energy – supporting climate-aligned industrialisation and energy transition goals

This strategic shift reflects a growing emphasis on resilient, innovation-driven value chains that respond to both regional development needs and global industrial trends.

The Private Sector as a Strategic Driver of Inclusive Industrialisation

The private sector is central to operationalising regional value chains. According to the Southern Africa Trust, UNCTAD (2023), and Afreximbank (2024), private actors enable structural transformation through investment, coordination, and enterprise development.

Key dimensions of this role include:

• Investment in Productive Capacity: Scaling operations to support cross-border supply chains in high-potential sectors such as pharmaceuticals, textiles, agro-processing, and renewable energy.
• Value Chain Coordination: Lead firms, often headquartered in South Africa, can anchor hub-and-spoke models that integrate smaller economies into regional production networks.
• Technology and Skills Transfer: Partnering with TVET institutions, universities, and innovation hubs to build capabilities for industrial upgrading and compliance readiness.
• Inclusive Enterprise Development: Supporting women-led businesses, youth entrepreneurs, and early-stage SMMEs through supplier development, mentorship, and market intelligence.
• Supplier Development and Market Access: Establishing inclusive procurement frameworks, providing export readiness support, and facilitating participation in regional trade platforms.
• Policy Engagement and Institutional Alignment: Co-developing gender-responsive trade policies, participating in co-implementation platforms, and contributing to monitoring tools that track enterprise impact.

Despite policy commitments, many enterprises face persistent structural barriers:

• Limited access to finance and working capital
• Fragmented market information and weak regional networks
• Low levels of technical capacity and compliance readiness
• Gendered constraints in ownership, mobility, and decision-making

Addressing these challenges requires coordinated action across public and private sectors. The private sector must move beyond advocacy to assume a proactive delivery mandate. Goshen’s advisory frameworks are designed to support this shift, enabling firms to align with AfCFTA and SADC priorities while operationalising inclusive industrialisation.

Enabling Conditions: The Role of the State

While the private sector leads implementation, governments must provide the enabling environment. This includes:

• Coherent trade and investment policies
• Infrastructure for logistics and energy
• Skills development and innovation systems
• Institutional platforms for public–private dialogue

These functions are essential to reduce transaction costs, improve competitiveness, and ensure policy coherence across member states.

A Strategic Way Forward

To realise inclusive industrialisation, SADC member states must transition from consultation to co-implementation. This requires a formalised compact between public and private sectors, recognising the private sector not just as a stakeholder, but as a delivery partner.

Although mechanisms such as the SADC Business Council, Private Sector Forum, and Public–Private Dialogue platforms have laid a strong foundation, they remain largely consultative. The next step is to embed private sector actors in the design, implementation, and monitoring of industrialisation programmes aligned with AfCFTA and Agenda 2063.

This compact should:

• Institutionalise co-implementation mandates across national and regional programmes
• Embed private sector actors in value chain diagnostics, investment planning, and skills development
• Align incentives, compliance frameworks, and market access instruments to support SADC-wide industrial upgrading
• Ensure accountability and transparency through joint monitoring and reporting mechanisms

By formalising this compact, SADC can unlock the full potential of its entrepreneurial base, accelerate regional integration, and deliver inclusive growth that is both scalable and sustainable.