Can Africa prosper without a successful manufacturing sector? Personally, I believe manufacturing is one of the mechanisms for driving innovation in Africa. The manufacturing sector is vital for Africa’s economic growth as it spurs development, creates employment, and is a symbol of trade power. If you think about it, the ability to manufacture goods gives countries more power because they trade more goods than they do services.
One of the reasons Africa is still the continent with the lowest intra-regional trade in the world is because African countries do not have much to buy from or sell to each other; hence Africa’s trade is mostly with countries outside the continent. According to the UN Economic Commission for Africa, the continent’s capacity has declined over the past two decades to 11% of GDP. Many manufacturing industries have declined over the years or simply cease to exist. In thee case of South Africa, its manufacturing sector declined from 20.9% in 1994 to 12% in 2012 according to the Industrial Development Corporation. While manufacturing represents only 9% of GDP in Nigeria and only 8% of GDP in Zambia.
The emergence of China as a global manufacturing powerhouse over the past two decades has further challenged the existing manufacturing base with other countries.
While it may be cost effective for us to import goods from China, Taiwan or South Korea, we need to be mindful that without the manufacturing sector, innovation can’t be sustained as many service providers would not be able to provide many of their services without manufactured goods.
In fact, imports undermine domestic manufacturing and export jobs that Africa so desperately needs. It is critical that we improve Africa’s manufacturing capability and support current SME manufactures.
I recently read about the African Union’s flagship project introducing a continental passport that will grant visa–free access to all 54 member States in Africa. The aim of this project is to facilitate free movement of people, goods and services around the continent to foster intra-Africa trade, integration and socio economic development. It is very encouraging to hear that African Heads of States are doing tangible things to remove barriers to trade within the continent.
There is still a lot to be done but we are certainly headed in the right direction, so if you arean entrepreneur and in the manufacturing, take advantage of some of these opportunities that a presenting themselves.