Leveraging the AfCFTA Under a Unified Industrial Policy for Africa

This policy brief argues that the African Continental Free Trade Area (AfCFTA) cannot reach its full potential without a unified industrial policy to address systemic supply-side constraints. The author contends that the current landscape of overlapping national, regional, and continental policies creates coordination failures and proposes a consolidated strategy focusing on pooled infrastructure resources, regional product specialisation, SME growth, clean energy, and indigenous technology.

• Sub-Saharan Africa (SSA) is characterized by low levels of industrialization and a trend of 'de-industrialisation,' where the industrial sector's contribution to GDP has declined as growth is driven primarily by the primary sector. In 2019, SSA's industrial output was $194 billion, significantly lower than South Asia ($491.6 billion) and Latin America and the Caribbean ($762 billion).
• African exports are heavily skewed toward raw materials and intermediate goods, with less than one-quarter (24%) of goods exported from the SSA region being final goods as of 2019. This indicates that the continent's participation in global value chains is limited to early stages of value addition.
• Industrial development in Africa is hindered by several critical constraints, including poor energy, water, transport, and telecommunications infrastructure. For example, as of 2019, only 46.75% of the SSA population had access to electricity, with some countries like Burundi, Chad, Central African Republic, and Malawi reporting access levels below 15%.
• The current industrial policy landscape is fragmented and 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, leading to coordination challenges and implementation delays.
• The author proposes a unified industrial policy that replaces the current coordination-based model with a collective implementation model. Key recommendations include establishing a common AU budget for infrastructure—potentially funded by member states committing up to 1% of GDP—and promoting regional specialisation based on comparative advantages to enhance African value chains.
• To ensure sustainable and inclusive growth, the proposed unified policy should prioritize the formalization and growth of SMEs, the adoption of clean energy to allow for 'technological leapfrogging,' and the development of indigenous African technologies to address local needs, citing the success of M-Pesa as a model.

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} }