Published in Jul 2017

Africa needs is a manufacturing renaissance, with more local value-addition that would create more and better-paid jobs

There are already several positive signs. Overseas Development Institute data show that African manufacturing production, exports and Foreign Direct Investment (FDI) have developed positively over the last decade. Between 2005 and 2014, manufacturing production within Africa more than doubled from $73 billion to $157 billion, growing 3.5% annually in real terms. Some countries, such as Uganda, Tanzania and Zambia, have achieved more than 5% annual growth in the recent past.

Investment in human capital, particularly in higher education and training, not only helps African countries excel in manufacturing production, but also to move up the value chain. The production of fairly low-tech processing of agriculture goods, textile and leather goods may help towards poverty alleviation but will not create a permanent dent on poverty. Therefore, the efforts made so far in this area need to be redoubled.

Finally, technology is a key driver of competitiveness, where African countries lag far behind their South Asian counterparts. Data is limited but suggest African countries spend less than 0.4% of GDP on research and development; compared with the south and west Asian average of 0.7%; and a global average of 1.7%.

It is not a new argument that these four pillars of institutions, infrastructure, human capital and technology, will drive manufacturing-led growth in Africa. On the contrary, these elements have been included by the World Economic Forum in its competitiveness analyses and are well embedded in the Agenda 2063 – which was carefully drafted, adopted and owned by the Heads of States of the African Union as a blueprint for accelerated development and technological progress of Africa. The only missing piece of the puzzle to realise these aspirations is the political will to deliver.

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By Axel Addy