Manufacturing

This report evaluates the state of industrialisation in Africa, analyzing the causes of stagnation and premature deindustrialisation while modeling a 'Manufacturing scenario' to forecast the potential economic benefits of scaled-up investment in the sector by 2043.

• Africa has experienced a trend of premature deindustrialisation, where structural transformation bypassed manufacturing and moved directly from agriculture into low-value services. This has left the continent's manufacturing share of GDP stagnating under 13% since 2020, with Africa's share of global manufacturing falling from approximately 3% in the 1970s to less than 2% in 2023.
• The report identifies several systemic barriers to African industrialisation, including colonial legacies focused on extraction, infrastructure deficits (such as unreliable power and poor transport), skills gaps in STEM and vocational training, and limited access to long-term affordable finance. In Nigeria, for example, approximately 90% of manufacturers rely on diesel generators due to grid instability, costing the sector an estimated US$27 billion annually.
• The African Continental Free Trade Area (AfCFTA), launched in 2021, is viewed as a critical catalyst for industrial growth by creating economies of scale and fostering regional value chains. Modelling suggests that full implementation of the AfCFTA could increase Africa's GDP by US$592 billion above the Current Path by 2043.
• Chinese investment is significantly shaping Africa's industrial landscape, with nearly one-third of the 10,000+ Chinese companies in Africa engaged in manufacturing, accounting for over 12% of the continent's industrial output. These firms often focus on meeting domestic African consumption rather than exports.
• The report models a 'Manufacturing scenario' starting in 2027 that envisions increased investment in manufacturing, R&D, and regulatory reforms. By 2043, this scenario predicts manufacturing's share of GDP would be 1.8 percentage points higher than the 'Current Path', adding US$168.2 billion to the sector and increasing total African GDP by US$282.8 billion.
• The proposed Manufacturing scenario would have significant social impacts by 2043, including the creation of 34.6 million additional jobs (3.7 million skilled and 30.9 million unskilled) and lifting 19.1 million more people out of extreme poverty (at US$2.15/day) compared to the Current Path.
• The Manufacturing scenario is expected to improve fiscal and individual economic outcomes by 2043, raising government revenues by US$81.6 billion and increasing GDP per capita by US$190 relative to the Current Path. The highest GDP per capita gains are projected for Botswana (US$1,018), Namibia (US$670), and Egypt (US$624).
• Africa is pursuing new industrial frontiers in automotive, pharmaceuticals, and green technologies. This includes the DRC-Zambia 'Battery Valley' initiative, which broke ground in March 2025 on the 900-hectare Musompo SEZ for battery and electric vehicle production.
• The report recommends that African governments prioritize the full implementation of AfCFTA, invest aggressively in hard infrastructure (especially power and transport), reform business regulations to reduce red tape, and align vocational training with industrial needs to harness the demographic dividend.

APA

Cilliers, J., & Ngundu, M. (2026). Manufacturing. Institute for Security Studies. https://futures.issafrica.org/thematic/07-manufacturing/

Chicago

Cilliers, Jakkie, and Marvellous Ngundu. Manufacturing. Institute for Security Studies, 2026. https://futures.issafrica.org/thematic/07-manufacturing/.

Wikipedia

{{cite report |last1=Cilliers |first1=Jakkie |last2=Ngundu |first2=Marvellous |title=Manufacturing |publisher=Institute for Security Studies |date=29 March 2026 |url=https://futures.issafrica.org/thematic/07-manufacturing/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cilliers2026manufacturing, author = {Cilliers, Jakkie and Ngundu, Marvellous}, title = {{Manufacturing}}, institution = {Institute for Security Studies}, year = {2026}, month = mar, url = {https://futures.issafrica.org/thematic/07-manufacturing/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }