Africa has an opportunity to nearly double manufacturing output from $500 billion today to $930 billion in 2025 with Africa’s economies no longer focusing on exporting commodities—but rather diverting to tapping into vibrant domestic demand. This is according to a new report by McKinsey Global
Three-quarters of this potential could come from Africa-based companies meeting fast-growing demand within Africa. Today, Africa imports one-third of food, beverages, and similar processed goods it consumes. The other one-quarter of the growth could come from more exports.
Accelerated industrialization could lead to a step change in productivity and the creation of six million to 14 million stable jobs over the next ten years—making realizing this a priority for governments.
Read: Time to celebrate our own industrialists
Read: Africa Embraces the Fourth Industrial Revolution, World Economic Forum 2016
In this year’s World Economic Forum, held in Kigali, President Kagame shared that this time round Africa should be hands on in Industrialisation. “Africa should not be still playing catch-up when the fifth revolution comes around,” he said as he called for “a continent free of pity and apprehension, a place of opportunity and partnership.”
With Africa shifting from majorly exporting primary goods, the $930 billion growth in manufacturing expected 2025 is justified. The potential for growth in the manufacturing sector in Africa remains massive, it is still a highly unexploited gold mine.
One Aliko Dangote from Nigeria has seen the potential and taken the risk to invest in such industries. Dangote, who is also the richest black man according to Forbes magazine, set up the Adaberga wereda-based cement manufacturing plant in Ethiopia, the government offered electricity at highly subsidized prices and the price of the commodity went down 60%. Aliko is also currently in the process of setting up Africa’s largest rice milling project in Nigeria, which when complete will see the price of rice drastically reduce.
Most African governments are willing to assist those willing to set up manufacturing based plants, as long as they can clearly see how such projects will benefit the country.
