Africa’s progress towards industrialisation has been slow, despite abundant natural resources, a youthful workforce, and the potential to become a global manufacturing hub. In various sectors, many African countries continue to rely on external imports of technology, patents, and professional expertise. The continent is still heavily reliant on Asia, particularly China, and North America for advanced electronics, machinery, and other high-tech manufacturing goods. While there are some local production capabilities, African countries are not yet global leaders in producing high-tech products for sectors like artificial intelligence, robotics, aerospace, and biotechnology.
There is also dependence that borders on overreliance on international loans, development aid, and foreign investments to finance large-scale infrastructure projects, technological advancement, and economic development. The lack of sufficient domestic capital, technological innovation, and sometimes unstable political environments means Africa depends on foreign investment to drive growth in key sectors.
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Several factors have held the continent back from fully realising its manufacturing potential, but these challenges are not insurmountable. Many African nations are making progress in overcoming these obstacles. Countries like Ethiopia and Kenya have focused heavily on improving their infrastructure to support industrial growth. Ethiopia, for example, has invested in large-scale industrial parks, such as the Hawassa Industrial Park, which attracts foreign investment and provides modern facilities for textile manufacturing. This is part of the Ethiopian government’s broader industrialisation strategy, which includes improvements in energy and transport networks. According to Africa Renewal, the government’s commitment to infrastructure is key to creating an enabling environment for industrialisation, leading to annual growth in the manufacturing sector of more than 10% since 2006.
Similarly, Kenya has been investing in modernising its port systems and road networks to facilitate trade. The Port of Mombasa, a vital gateway for East Africa, has seen major upgrades to handle increased traffic, supporting the region’s growing manufacturing and export sectors.
Ethiopia and Rwanda serve as leading examples of how strong political commitment can drive industrialisation. Ethiopia’s industrialisation strategy is characterised by a developmental state model, which sees the government actively involved in setting and implementing policies that support local industries. By attracting foreign investments in sectors like textiles and leather, the government has helped create thousands of jobs. Similarly, Rwanda’s emphasis on business-friendly reforms, such as simplifying business registration and reducing red tape, has made the country one of the top 10 most business-friendly environments in Africa, according to the World Bank’s Doing Business report.
In South Africa, the government has fostered public-private partnerships to develop its automotive manufacturing sector. The country is now a key automotive hub on the continent, producing vehicles for both local consumption and export, driven by policies that incentivise investment and local production.
Technological advancement is key to improving efficiency and productivity in manufacturing. Countries like South Africa, Egypt, and Morocco are investing heavily in adopting new technologies, including automation and artificial intelligence (AI), to modernise their industrial sectors. The establishment of tech hubs and innovation centres is also fostering localised solutions to manufacturing challenges.
What is the Future of Manufacturing in Africa?
1. Infrastructure Deficits
One of the primary factors hindering Africa’s manufacturing revolution is the continent’s inadequate infrastructure. Many African countries continue to face challenges related to unreliable electricity supply, poor road networks, and limited access to ports. Power shortages alone are a significant hindrance to industrial activities, with African businesses experiencing frequent electricity blackouts that disrupt production and inflate operational costs. “In countries like South Africa and Nigeria, the power supply remains erratic, and inadequate transport infrastructure adds further costs,” says a report by the London School of Economics (LSE). This creates a vicious cycle of inefficiency that impedes the growth of competitive industries.
Africa is increasingly investing in renewable energy sources like solar and wind power, but the technology, equipment, and investment for large-scale renewable energy projects still primarily come from Europe, Asia (especially China), and North America. Many African nations export raw oil but rely on refineries in Europe, Asia, and the Middle East for refined petroleum products.
However, improvements are being made. The African Union’s Programme for Infrastructure Development in Africa (PIDA) aims to enhance the continent’s energy, transport, and ICT infrastructure. Notably, the development of Special Economic Zones (SEZs) in countries such as Ethiopia is showing how targeted investments in infrastructure can drive industrial growth. The Hawassa Industrial Park in Ethiopia, for instance, has attracted foreign direct investment, particularly in the textile sector, illustrating the transformative potential of infrastructure development when strategically implemented.
2. Political Instability and Governance Issues
Political instability and governance issues have long plagued many African nations. Frequent changes in government, inconsistent policies, and corruption discourage both local and foreign investors. For instance, in countries like Nigeria, political and regulatory unpredictability often undermines long-term industrial planning, with investors uncertain about the stability of business environments.
Yet, not all African countries are facing these issues. Ethiopia, for example, has become a notable success story. The country has shown that political commitment to industrialisation can yield substantial results. According to the UN’s Africa Renewal magazine, Ethiopia has maintained an average annual manufacturing growth rate of more than 10% since 2006, driven by strategic government policies that support the manufacturing sector. This includes providing incentives for foreign investors, such as favourable tax policies and infrastructure development. Rwanda is also an example of political will driving industrialisation, with its “developmental state” model encouraging economic regulation and market-friendly policies to foster industrial growth.
3. Over-reliance on Raw Materials and Lack of Value Addition
Africa’s economy has traditionally been centred on the extraction and export of raw materials such as oil, minerals, and agricultural products. This over-reliance on raw material exports limits the potential for value addition and impedes the development of a robust manufacturing sector. According to the World Bank, the manufacturing sector’s contribution to Africa’s GDP remains low, with much of the continent’s resources shipped abroad in raw form, only to return as finished products.
However, countries are beginning to pivot towards more value-added manufacturing. South Africa has led the way, becoming a major player in industries such as automotive manufacturing. The country is home to one of Africa’s largest automotive industries, producing nearly 1 million vehicles annually, with manufacturers like BMW and Volkswagen investing heavily in local production. Similarly, Morocco has focused on building a competitive automotive sector, positioning itself as a strategic location for car assembly and export to Europe.
4. Access to Capital and Technological Advancement
The lack of access to capital is another critical barrier to manufacturing growth. Many African manufacturers struggle to secure funding for large-scale industrial projects, with financing options often limited to high-interest loans. Furthermore, many industries continue to rely on outdated technologies, which reduces efficiency and competitiveness in global markets.
African governments are increasingly recognising the need to improve access to financing. The African Development Bank’s industrialisation strategy for the continent has called for greater investment in human capital, technological development, and access to affordable finance. Similarly, the emergence of venture capital and private equity funds focused on Africa’s manufacturing sector is providing new opportunities for financing industrial ventures.
5. Regional Integration and Trade Barriers
One of the most promising developments for Africa’s manufacturing sector is the African Continental Free Trade Area (AfCFTA), which aims to eliminate tariffs and reduce non-tariff barriers across the continent. The AfCFTA has the potential to create a single market for goods, services, and investment, making it easier for manufacturers to expand operations and trade within Africa. “A more integrated African market would offer manufacturers economies of scale, reduce reliance on expensive imports, and promote intra-African trade,” notes a report by Engineering News.
While the AfCFTA is a positive step forward, implementation remains slow, and there are still significant barriers to regional integration, such as conflicting regulations and political differences. To fully leverage the benefits of AfCFTA, Africa must continue working on harmonising policies, improving infrastructure, and fostering closer economic ties between countries.
6. Global Competition and Protectionism
Finally, Africa’s manufacturing sector faces tough competition from established global players, such as China, which has dominated manufacturing over the last few decades. Protectionist policies in wealthier countries also make it difficult for African goods to compete on the global market. The World Trade Organisation (WTO) has reported an increase in trade-restrictive measures among developed economies, which could limit the market access for African manufacturers.
Some African policymakers argue for “smart protectionism,” a strategy that involves using targeted measures to protect nascent industries until they become competitive. This approach has been successfully applied in countries like China and South Korea, and it could serve as a useful model for African nations looking to develop their manufacturing sectors while still participating in global trade.
Despite the continent’s considerable challenges—ranging from infrastructural gaps and political instability to heavy reliance on raw material exports—there is undeniable progress. The success stories of nations like Ethiopia, Kenya, South Africa, and Morocco reveal the potential inherent. However, achieving a manufacturing revolution requires more than incremental progress; it demands a concerted, long-term commitment to addressing key barriers such as access to capital, value addition, and regional integration.
