Leveraging the AfCFTA Under a Unified Industrial Policy for Africa

The author contends that Africa's industrialization is hindered by a fragmented policy landscape where countries are often subject to three or more overlapping industrial strategies. This coordination failure, combined with poor infrastructure and low innovation capacity, has led to 'de-industrialisation' in Sub-Saharan Africa, where the industrial sector's contribution to GDP has declined relative to the primary sector. To leverage the AfCFTA, the paper proposes a unified industrial policy focusing on pooled resources for infrastructure, regional product specialization, SME growth, clean energy transitions, and the development of indigenous technologies.

• Sub-Saharan Africa (SSA) has experienced 'de-industrialisation', as the industrial sector's contribution to overall GDP declined between 1981 and 2020 while the primary sector drove growth. In 2019, the industrial sector employed only 10.7% of the region's workforce, compared to 52.9% in agriculture, forestry, and fisheries.
• African exports are dominated by low-value-added goods; as of 2019, 44% of goods exported from the SSA region were raw materials and 32% were intermediate goods, while final goods accounted for less than one-quarter (24%) of exports.
• The current industrial policy framework is inefficient due to overlapping commitments at national, regional economic community (REC), and continental levels. Some countries, such as Kenya, Tanzania, Uganda, Malawi, Eswatini, Zambia, and Zimbabwe, are subject to as many as four different industrial policies.
• Infrastructure deficits significantly increase trade costs; for example, non-tariff trade costs between ECOWAS and EAC averaged more than 400% between 2015 and 2019. Energy access is particularly low, with less than 15% of the population having electricity in countries like Burundi, Chad, Central African Republic, and Malawi as of 2019.
• Africa lacks significant innovation capacity, with only four SSA countries appearing in the top 100 of the Global Innovation Index: South Africa (61st), Kenya (85th), Tanzania (90th), and Namibia (100th).
• The author proposes a unified industrial policy that includes pooling resources for continental infrastructure (suggesting countries commit up to 1% of GDP), promoting regional specialization to enhance value chains, and supporting SMEs and informal cross-border trade (ICBT).
• The document advocates for a 'clean energy-based industrialisation' strategy, suggesting Africa can leapfrog traditional carbon-based energy paths by moving directly to sustainable energy sources like solar and hydrogen power.

APA

Matola, J. U. (2022). Leveraging the AfCFTA Under a Unified Industrial Policy for Africa. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2022/05/Policy-Insights-128-matola.pdf

Chicago

Matola, Joseph Upile. Leveraging the AfCFTA Under a Unified Industrial Policy for Africa. South African Institute of International Affairs, 2022. https://saiia.org.za/wp-content/uploads/2022/05/Policy-Insights-128-matola.pdf.

Wikipedia

{{cite report |last1=Matola |first1=Joseph Upile |title=Leveraging the AfCFTA Under a Unified Industrial Policy for Africa |publisher=South African Institute of International Affairs |date=May 2022 |url=https://saiia.org.za/wp-content/uploads/2022/05/Policy-Insights-128-matola.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{matola2022leveraging, author = {Matola, Joseph Upile}, title = {{Leveraging the AfCFTA Under a Unified Industrial Policy for Africa}}, institution = {South African Institute of International Affairs}, year = {2022}, month = may, url = {https://saiia.org.za/wp-content/uploads/2022/05/Policy-Insights-128-matola.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }