Reasons for Africa’s Under-Industrialisation

The report identifies a complex web of barriers to industrialisation in Africa, including colonial legacies of extractive industries, chronic infrastructure deficits in power and transport, and a lack of skilled technical labour. It highlights how policy inconsistencies and limited access to affordable long-term finance have hindered growth, while noting that global competition from Asia and the rise of automation challenge the traditional low-wage labour advantage. However, it points to opportunities arising from 'China+1' diversification strategies and the potential of the AfCFTA to reduce internal trade costs.

• Colonial legacies created a path-dependency where infrastructure and institutions were designed for extractive industries and commodity exports rather than manufacturing, forcing post-independence growth to start from a very limited industrial base.
• Unreliable power supply is a critical barrier to competitiveness; in Nigeria, approximately 90% of manufacturers rely on diesel generators, resulting in an estimated annual loss of US$27 billion due to power outages.
• Africa faces a severe transport infrastructure gap compared to other regions; in 2018, sub-Saharan Africa held only 6% of global road networks despite representing 17% of the world's land mass, and its paved road network is roughly one-sixth the size of India's.
• Infrastructure deficits significantly impact economic performance, with World Bank estimates suggesting they reduce annual economic growth by about two percentage points and lower business productivity by up to 40% in some countries.
• A shortage of skilled technicians, engineers, and managers, combined with low investment in research and development (R&D), forces firms to either pay for expensive training or rely on expatriate expertise.
• Access to long-term finance is limited because banks often perceive manufacturing as too risky compared to resource deals, and shallow capital markets make raising equity or bond financing difficult.
• Global shifts, such as the 'China+1' strategy and pandemic-driven supply chain diversification, offer Africa opportunities to attract investment in apparel, automobiles, and pharmaceuticals, provided it can mitigate risks and costs.

APA

Cilliers, J., & Ngundu, M. (2026). Reasons for Africa’s Under-Industrialisation. Institute for Security Studies. https://futures.issafrica.org/thematic/guide.pdf?thematic=07-manufacturing&topic=05-reasons-for-under-industrialisation

Chicago

Cilliers, Jakkie, and Marvellous Ngundu. Reasons for Africa’s Under-Industrialisation. Institute for Security Studies, 2026. https://futures.issafrica.org/thematic/guide.pdf?thematic=07-manufacturing&topic=05-reasons-for-under-industrialisation.

Wikipedia

{{cite report |last1=Cilliers |first1=Jakkie |last2=Ngundu |first2=Marvellous |title=Reasons for Africa’s Under-Industrialisation |publisher=Institute for Security Studies |date=29 March 2026 |url=https://futures.issafrica.org/thematic/guide.pdf?thematic=07-manufacturing&topic=05-reasons-for-under-industrialisation |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cilliers2026reasons, author = {Cilliers, Jakkie and Ngundu, Marvellous}, title = {{Reasons for Africa’s Under-Industrialisation}}, institution = {Institute for Security Studies}, year = {2026}, month = mar, url = {https://futures.issafrica.org/thematic/guide.pdf?thematic=07-manufacturing&topic=05-reasons-for-under-industrialisation}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }