The Manufacturing Sector in Africa

This research paper by the Institute for Security Studies analyzes the state of the manufacturing sector across Africa, highlighting a trend of premature deindustrialization and the varying levels of industrialization across different income groups. It examines the role of Chinese investment in the continent's industrial landscape and the challenges African nations face in moving from raw material exports to high-value manufacturing.

• African manufacturing varies significantly by income level: low-income countries rely on small, informal micro-enterprises; lower-middle-income countries focus on agro-processing and construction materials; and upper-middle-income countries possess more mature sectors like automotive, chemicals, and machinery.
• Sub-Saharan Africa has experienced a trend of premature deindustrialization, where countries are losing manufacturing capacity while still poor, failing to transition workers from agriculture to factory jobs. Since the mid-1990s, the manufacturing share of GDP in sub-Saharan Africa has remained at or below 12%.
• Most African nations fall short of the UNIDO benchmark of 20% manufacturing value added to GDP required to drive structural transformation. Eswatini is the only low-middle-income country to exceed this, reaching 27% in 2023, while larger economies like South Africa (13%), Kenya (12%), and Nigeria (8%) remain below the threshold.
• Chinese companies have a significant impact on Africa's industrial sector, with nearly one-third of the 10,000+ Chinese firms in Africa engaged in manufacturing, contributing over 12% of the continent's industrial output. These firms are primarily small, private enterprises targeting domestic consumption rather than exports.
• Chinese investment in Africa includes large-scale projects such as the biggest ceramic tile factory in Ethiopia and the Manhize steel plant in Zimbabwe, completed in 2024. Additionally, Chinese firms hold nearly 50% of the internationally contracted construction market in Africa.
• Africa's export economy is dominated by raw materials, resulting in a loss of value as processed goods are imported from other regions. Examples include exporting raw cocoa beans while importing high-value chocolate from Europe, and exporting crude oil while importing petrochemicals.
• Certain countries have successfully increased manufacturing through specific policies: Eswatini used trade preferences for apparel, Rwanda invested in infrastructure and business reforms for construction and agro-processing, and Tanzania saw manufacturing output grow 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} }