Manufacturing Success: Charting a Course for Africa’s Industrial Future

Africa’s industrial ambition has long been recognized as critical to its economic development. While progress has been uneven across the continent, recent data from the African Development Bank (AfDB) reveals both challenges and emerging opportunities.

The 2025 Africa Industrialisation Index shows that manufacturing value-added grew from $285 billion in 2020 to $351 billion last year—a 24% increase. However, this still represents less than 2% of global manufacturing output and only 1.4% of exports.

The most striking finding is that Morocco has overtaken South Africa as the continent’s industrial powerhouse, achieving a score of 0.8415 in the index compared to South Africa’s 0.8396—a significant shift after decades of South African dominance.

Regional Industrial Landscape

The North and Southern regions continue to lead, with countries like Mauritius, Eswatini, Namibia, Senegal, Côte d’Ivoire, Kenya, Uganda, Tanzania, Gabon, and the Democratic Republic of Congo showing varying degrees of industrial advancement. Libya and Mauritania lag significantly behind.

Competitiveness Concerns in East Africa

In Kenya, manufacturers report a steady decline in competitiveness over the past decades—from 15% of GDP in the 1990s to just 7.2% today. Several multinational companies have scaled back local production in favor of importing goods from more competitive locations.

“Electricity is the most important utility, with both reliability and cost being critical,” says Jaswinder Bedi, managing director of Bedi Investments, a textile manufacturer employing over 2,000 workers. “Kenya has improved on reliability but the cost remains high—between $0.18 to $0.23 per kWh compared to Morocco’s $0.09 to $0.12 and South Africa’s lower rates.”

This trend highlights a critical challenge for African manufacturers: rising input costs eroding competitiveness in both domestic and global markets.

Key Implications for Industrial Policy

Africa’s industrial transformation requires focused interventions across several fronts:

• Infrastructure investment: Reliable power, transportation networks, and digital connectivity are essential foundations\n* Access to finance: Targeted credit facilities and risk mitigation instruments can unlock private sector investment\n* Human capital development: Skills training programs aligned with industry needs\n* Industrial policy frameworks: Strategic support for priority sectors while ensuring a level playing field\n* Regional integration: Expanding market access through trade agreements

By addressing these structural constraints and building on success stories like Morocco’s industrial upgrading, African countries can accelerate their manufacturing base and create more resilient economies.