Manufacturing key to Africa’s future

Despite a recent downturn in the global economy, an unprecedented shift is underway throughout the so-called non-West. From Southeast Asia to Latin America, these economies have seen explosive urbanization and the emergence of a new middle class. Manufacturing remains the engine behind the re-emergence of non-Western economic power.

Africa remains an anomaly in this transformative story. With one of the world’s fastest-growing populations, Africa’s urbanization rates are also exploding. Yet its economies are not meeting their potential. While the continent has benefited from the internet to create new industries, its manufacturing sector has lagged woefully behind those of the rest of the world. Poor governance, a lack of investment in local and regional infrastructure and high costs are all factors behind the abysmal state of the sector.

If African countries want to free themselves from the remnants of colonialism and establish healthy economies, leaders must get serious about manufacturing. A robust manufacturing sector that absorbs large numbers of workers is the tried and tested path to independence. Factories offer pathways from working class to middle class and even to higher management that no other sector can compete with. It worked in the West; it worked for the Asian Tiger economies.

First, some optimism: The African Union recognizes the potential positive impact manufacturing investment — and, by extension, trade — can have for the continent. The regional body placed serious focus on the sector in its Agenda 2063, with targets for infrastructure upgrades, regional trade agreements and the creation of several special economic zones in countries outside of the traditional African manufacturing bases of South Africa, Nigeria and Egypt. Additionally, small countries are embracing a manufacturing ethos. In Ethiopia, for example, small textile companies are trying to create a viable manufacturing sector from the ground up. SoleRebels, a footwear company that has expanded across the world, is one such company. Each of its shoes is crafted by hand in Ethiopia and the founder, Bethlehem Tilahun Alemu, says she has no intention of outsourcing labor as her brand continues to grow.

Yet, more generally, the road is going to be long and hard for Africa’s manufacturing sector. Opening a factory remains an expensive and bureaucratic process. And, despite high levels of unemployment, labor costs were found to be high in countries from South Africa to Tanzania.

The reason for this, in one word, is corruption. It exists on a massive scale through the accumulation of a multitude of small payoffs.

Without broad political will on a national level, there will be little change. Politicians need to get out of the way by enacting manufacturing and trade-friendly laws, better preventing officials from seeking bribes at every stage of life, and building the infrastructure so Africans can trade with each other. Africa needs a “lion economy.”