Africa industrialization: A recent index report showed that Tanzania’s agro sector is mechanizing rapidly on the back drop of value addition mini-factories, the revolution is not unique to Tanzania, it is happening continent wide and North Africa is leading.
Evidence to this fact lies in the pages of the Africa Industrialization Index (AII) report that show more than 35 of Africa’s 52 countries have become more industrialized over the span of the last decade.
The multi-stakeholder report, prepared by the African Development Bank, the African Union and the United Nations Industrial Development Organization (UNIDO), attests to an ongoing industrial revolution in Africa.
The Africa Industrialization Index (AII) uses 19 indicators to rate each country’s level of industrialization ranging from performance of its manufacturing sector, capital, labor to a country’s business environment, its infrastructure and even its entire macroeconomic status.
The report authors say it gives African governments a chance to compare individual performance against the others, but it gives us a bird a view of the industrial progress of the continent.
Capital and labor are considered direct determinants of Africa industrialization, how they are employed to bring about industrial development gives a measure of a country’s industrialization ambition while a sound business environment is considered to an enabling factor, an indirect determinant of Africa Industrialization.
According to the Africa Industrialization Index (AII), once again it is South Africa that took the mantle with impressively high ranking throughout the decade of review (2010-2021). Next in line is not Egypt or Nigeria but Morocco, which holds second place as of 2022.
Some other key players that you don’t see on the evening news every so often include Tunisia, Mauritius, and Eswatini.
- The Africa Industrialization Index (AII) report shows more than 35 of Africa’s 52 countries have become more industrialized
- South Africa remains the most industrialized African nation
- Despite improved industrialization, Africa’s share of global manufacturing has declined
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These nations have not been highlighted based on the size of their economies, but rather, the index ranks countries based on their ability to ‘generate high manufacturing value-added per capita.’
That’s not all, the Africa Industrialization Index (AII) also considers favourably, manufacturing not for domestic use only but ‘with a substantial proportion of manufacturing goods bound for export.’
With these factors considered, even though South Africa as a country leads the continent in Africa industrialization it is the North Africa region as a whole that is the most advanced in industrial development.
Regionally speaking, in Africa, the north is the most industrialized followed by Southern Africa, Central Africa, West Africa and last is the East African region.
Overall, most remarkable industrialization progress on the continent has been notably from Djibouti, Benin, Mozambique, Senegal, Ethiopia, Guinea Rwanda, Tanzania, Ghana, and Uganda; each one of these countries has gone up the index scale by at least five places in the period under review.
Africa’s industrialization progress was the center topic at the summit on Industrialization and Economic Diversification and the extraordinary Session on the African Continental Free Trade Area in November.
Africa industrialization impact on global scales
Despite the commendable progress in Africa industrialization, the index shows a worrisome trend. According to the report, the continent’s ‘share of global manufacturing has declined to the current level of less than 2%.’
It all boils down to more political will to proactively seek out scholar and expert support, to back industrial policies, the index indicates the need for ‘knowledge-intensive and detailed understanding of the constraints and opportunities that each country faces.’
You see, the global pandemic helped highlight Africa’s need for independence and that fact was further hammered in by the Russia-Ukraine war. Africa’s external dependence on food, final products and medicine leaves it vulnerable to world events.
None put it better than Abdu Mukhtar, the African Development Bank Director for Industrial and Trade Development, who said, ”…while Africa has shown encouraging progress in industrialization over the 2010-2022 period, the Covid-19 pandemic and Russia’s invasion of Ukraine set back its efforts and highlighted gaps in production systems.”
That been the fact; “The continent has a unique opportunity to sort out this dependency by further integrating and conquering its own emerging markets.”
Here, the banker was speaking of the African Continental Free Trade Area, a 1.3 billion market that enjoys aggregate spending of up to $4 trillion. Should Africa make use of this opportunity, then it can “…finally reap industrial competitiveness from regional integration as other regions have done.”
Also Read: The potential of the fourth industrial revolution in Africa
Collecting industrialization data
To help collect progress data in the bid to industrialize, the Africa Industrialization Index has in place what is known as the African Industry Observatory. This instrument serves as a one stop data collection platform.
The African Industry Observatory is the data collection point. Here is where data can be organized, analyzed and consolidated. The authors describe it as the pint where quantitative data is collected for qualitative analyses that provides industry trends, forecasts and provides opportunity for comparisons and learning of best practices.
Why is this data important? Chiza Charles Chiumya, the African Union Commission’s Acting Director for Industry, Minerals, Entrepreneurship & Tourism, has a clear and concise answer.
“These tools are going to greatly enhance our industrial policy making as well as help to bring in the required focus that industrialization needs both from policymakers as well as the private sector, who will now clearly see where the continent has opportunities,” he explains.
Seconding the view, Victor Djemba, Chief of UNIDO’s Africa division had this to say; “The African Industry Observatory and the Africa Industrialization Index will help consolidate cross-institutional cooperation, strengthen each institution’s policy dialogue influence for accelerating industrial development and an enhanced knowledge of industrial development dynamics.”
Both stakeholders were presented their views during the African Union Extraordinary Summit on Industrialization and Economic Diversification and the African Union Extraordinary Session on the African Continental Free Trade Area which were held in Niamey, Niger, this November.
Running under the theme: Industrializing Africa: Renewed Commitment towards Inclusive and Sustainable Industrialization and Economic Diversification,’ the two events, the summit on Industrialization and Economic Diversification and the Session on the African Continental Free Trade Area, are both aimed at paving the way for expedited Africa industrialization.
The vision of an Africa that is industrialized and trades within itself and is sub-independent of global economic woes seems far-fetched, but, in reality, it is an ambition that must be pursed if the continent is to feed itself even in the face of offshore wars, even when borders are closed in the next pandemic, Africa will continue to trade that is the purpose of the summit on Industrialization and Economic Diversification and the Session on the African Continental Free Trade Area.
