A new report by two United Nations agencies is calling on African governments to take steps to expand labour-intensive manufacturing such as textiles and apparel if the continent is to avoid rising levels of unemployment and escalating poverty.

Africa accounts for just 1% of global manufacturing, according to the United Nations Industrial Development Organization (UNIDO) and the UN Conference on Trade and Development (UNCTAD).

And the agencies argue that without effective measures to expand this vital economic sector, governments cannot realistically hope to reduce widespread poverty.

The just-published Economic Development in Africa Report 2011 wants to see a practical, well-designed approach to industrialisation geared to the individual needs of each of Africa's 53 nations.

It specifically notes that Africa is losing ground in labour-intensive sectors like textiles, apparel and leather products, which are generally the entry-level step in industrial development but play a rather limited role in African manufacturing today, both in terms of domestic manufacturing production as well as exports.

The share of labour-intensive activities in manufacturing value-added (MVA) fell from 23% in 2000 to 20% cent in 2008, it says.

A large part of this change is due to a decline in the share of textiles, from about 7% in 2000 to 5% in 2009 - even though this, along with apparel and fabricated metals are the continent's three most important labour-intensive manufacturing activities.

Part of this decline is put down to a lack of government support, red tape, a shortage of relevant skills or cheap raw materials, finance, and even problems with the local infrastructure such as roads, railroads and electricity supplies.

While the report acknowledges that newly industrialising African economies may find it hard to compete in low-cost clothing, textile and footwear segments, it suggests they should look at producing "innovation-intensive or technology-intensive niche products."

And it says the continent can position itself to supply growing consumer markets generated by China and India as these countries expand their urban middle classes in the years ahead.