Despite the continent’s proud and illustrious history of making and building things – the golden rhino of Mapungubwe and Great Zimbabwe among them – today, Africa suffers from a dearth of manufacturing. This hangover from the pre-independence era – which was typified by a colonial obsession with extracting raw materials for export rather than making goods with them – has been compounded by the inadequate success that industrial development initiatives and policies have had in recent decades. Our minnow-sized manufacturing sector means that:
- In Sub-Saharan Africa, industry only employs a mere 11% of workers (according to the World Bank).
- Research shows that those folk who do consider leaving the continent’s largest employer, agriculture, typically end up “low-skill, low-productivity services” roles rather in manufacturing, as Lilac Nachum, Professor of International Business at the City University New York, points out
There is a strong case for changing this unfortunate reality. If we build a thriving, proudly manufacturing sector, Africa can achieve:
- Economic liberation: Manufacturing has the potential to offer Africans significantly greater employment and, in turn, prosperity and wellbeing
- Global connection: If export-oriented, manufacturing will be a valuable source of foreign currency, improving the balance of trade, and growing GDP
- Domestic resilience: In the age of supply-chain bottlenecks and other logistical shocks that can lead to long queues and empty shelves at a moment’s notice, building self-sufficiency through developing reliable, local sources of quality products (including pharmaceuticals, clothing and food – much of which is imported) has become more important than ever
Many stakeholders, one goal
Africa is home to a wealth of raw materials as well as an agricultural sector that harbors huge, but as yet largely untapped, potential. In order to unleash the widespread beneficiation of these resource riches, the development of infrastructure that supports manufacturing needs to be drastically scaled up. For that to succeed, a whole-of-society approach is needed.
Governments need to make manufacturing a priority – wielding political will and developing and implementing intelligent, outcomes-driven policy. Their interventions should include:
- Offering financial instruments (for example, subsidies, tax rebates and incentives) as well as funding for major infrastructure projects that will create an enabling environment for manufacturing to grow. This includes upgrading/expanding (and, where applicable, establishing new) transport links, in particular railways (as a cost-effective means of moving both raw materials and finished products domestically) and ports to facilitate exports
- Leveraging diplomatic relationships within regional economic communities (such as Ecowas and Sadc) to promote infrastructure corridors, tariff-free trade and other initiatives that will encourage seamless, speedy and cost-effective cross-border trade of goods
- Lobbying financial institutions such as the African Development Bank, Development Bank of Southern Africa and the Industrial Development Corporation to provide capital and credit for manufacturing-related infrastructure and facilities
- Working with lawmakers to craft legislation and policies that encourage more African women (who have historically been economically marginalized and forced to work in menial, underpaid jobs) to enter the traditionally male-dominated construction and manufacturing sectors. Not only will this expand the workforce; it’ll also drive economic activity in both sectors
Supported by governments, established entrepreneurs and like-minded investors (both African and foreign) should drive the construction of industrial parks, warehouses, factories, assembly plants and offices. Private capital should also flow towards the building of schools and hospitals, as this results in a virtuous circle: better and more accessible healthcare and education will nurture new generations of entrepreneurs, industrialists and workers and this will, in turn, spur economic development. Aside from investments, philanthropic involvement by Africa’s entrepreneurial giants such as cement magnate Aliko Dangote in this space can have a potentially transformative impact, boosting not just economies but also bringing the continent closer to the all-important realization of the UN Sustainable Development Goals.
There is increased focus on environmental concerns worldwide – both climate incentives (like the U.S.’s Inflation Reduction Act) and taxes (such as the E.U.’s Carbon Border Adjustment Mechanism) are likely to have far-reaching effects on the global economic order. With that in mind, the building of Africa’s manufacturing sector presents an opportunity to achieve development that is truly sustainable and attractive to foreign markets. Abundant wind and sunshine – and rapid reductions in the cost of renewable generation – will enable us to unleash an industrial revolution that is cleanly powered. Already a shift is underway, as is evidenced by the growth of the continent’s green cement sector which was valued at USD 485.1 million in 2022 and is set to almost double in size by 2028.
Making the quantum leap towards realizing a flourishing domestic manufacturing sector in Africa will not be without its challenges and curveballs. However, I am confident that if we all work together towards this goal, we will undoubtedly get there, ushering in a new era of growth and prosperity. Let us be bold!