The Manufacturing Sector in Africa

The document examines the diverse nature of Africa's manufacturing sector, noting that most countries remain outliers with low manufacturing shares of GDP. It highlights a trend of 'premature deindustrialization' in low-income countries and the significant role of Chinese private enterprises in meeting domestic demand. While most of the continent relies on raw material exports, a few countries like Eswatini and South Africa show higher industrial competitiveness.

• Africa's manufacturing sector varies significantly by income level: low-income countries (e.g., Chad, Malawi, Burundi, DR Congo) rely on small, informal micro-enterprises; lower-middle-income countries (e.g., Kenya, Ghana, Nigeria) focus on agro-processing and construction materials; and upper-middle-income countries (e.g., South Africa, Mauritius, Botswana, Namibia) possess mature sectors like automotive, chemicals, and machinery.
• Sub-Saharan Africa has experienced a stagnation in manufacturing's share of GDP, remaining around or below 12% since the mid-1990s, which is significantly lower than the 20–30% peaks seen in East Asia or Latin America. North Africa is the most industrialised region, with a 15% contribution to GDP in 2023.
• Many low- and lower-middle-income African countries are undergoing 'premature deindustrialization,' where they miss the traditional transition from agriculture to factory jobs. This is driven by limited industrial competitiveness, a small pool of skilled labour, and the absorption of labour by low-end service opportunities.
• According to UNIDO, manufacturing value added should reach at least 20% of GDP to drive structural transformation. Only Eswatini exceeds this threshold (27% in 2023), partly due to trade access to the US market via AGOA. Major economies like South Africa (13%), Kenya (12%), and Nigeria (8%) fall short.
• Chinese companies have a significant impact on Africa's industrial landscape, with nearly one-third of over 10,000 Chinese firms in Africa engaged in manufacturing, accounting for over 12% of industrial output. These are primarily small, privately owned enterprises targeting domestic consumption rather than exports.
• Chinese firms dominate debt-financed infrastructure, holding nearly 50% of the internationally contracted construction market. They often provide skills training and have reduced prices for some products and services by up to 40% through economies of scale and technology.
• Africa's exports remain heavily dominated by raw materials, capturing very little of the value chain. Examples include exporting unprocessed cocoa beans while importing high-value chocolate, and exporting crude oil while importing fuels and petrochemicals.
• Some countries have successfully increased manufacturing through policy: Eswatini used trade preferences for apparel; Rwanda invested in infrastructure and business reforms for construction materials and agro-processing; and Tanzania's manufacturing output grew by over 7% annually from 1997 to 2017.

APA

Cilliers, J., & Ngundu, M. (2026). The Manufacturing Sector in Africa. Institute for Security Studies. https://futures.issafrica.org/thematic/guide.pdf?thematic=07-manufacturing&topic=04-manufacturing-sector

Chicago

Cilliers, Jakkie, and Marvellous Ngundu. The Manufacturing Sector in Africa. Institute for Security Studies, 2026. https://futures.issafrica.org/thematic/guide.pdf?thematic=07-manufacturing&topic=04-manufacturing-sector.

Wikipedia

{{cite report |last1=Cilliers |first1=Jakkie |last2=Ngundu |first2=Marvellous |title=The Manufacturing Sector in Africa |publisher=Institute for Security Studies |date=29 March 2026 |url=https://futures.issafrica.org/thematic/guide.pdf?thematic=07-manufacturing&topic=04-manufacturing-sector |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cilliers2026manufacturing, author = {Cilliers, Jakkie and Ngundu, Marvellous}, title = {{The Manufacturing Sector in Africa}}, institution = {Institute for Security Studies}, year = {2026}, month = mar, url = {https://futures.issafrica.org/thematic/guide.pdf?thematic=07-manufacturing&topic=04-manufacturing-sector}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }