Rising prospects for manufacturing in Africa

Danald Kaberuka, President of the African Development Bank Group tweeted this article from The Economist about the growing African industrial opportunities. The article mentions H&M, Buffalo Bikes and General Electrics as pionners in the industry.

Those who cast doubt on Africa’s rise often point to the continent’s lack of manufacturing. Few countries, they argue, have escaped poverty without putting a lot of workers through factory gates. Rick Rowden, a sceptical development pundit, says, “Apart from a few tax havens, there is no country that has attained a high standard of living on the basis of services alone.”

Yet a quiet boom in manufacturing in Africa is already taking place. Farming and services are still dominant, backed by the export of commodities, but new industries are emerging in a lot of African countries.

[…]

H&M, a multinational Swedish retail-clothing firm, and Primark, an Ireland-based one, source a lot of material from Ethiopia. General Electric, an American conglomerate, is building a $250m plant in Nigeria to make electrical gear. Madecasse, a New York-based chocolatier, is looking for new hires to add to its 650 workers in Madagascar already turning raw cocoa into expensively wrapped milky and nutty bars. Mobius Motors, a Kenyan firm started a few years ago by Joel Jackson, a Briton, is building a cheap, durable car for rough roads.

Domestically owned manufacturing is growing, too. Seemhale Telecoms of South Africa is planning to make cheap mobile phones for the African market. Angola says it is to build its own arms industry, with help from Brazil. African craftsmen are making inroads in fashion. Ali Lamu makes handbags from recycled dhow sails on the Kenyan coast and sells them on Western websites.

[…]
Kenya is not about to become the next South Korea. African countries are likely to follow a more diverse path, benefiting from the growth of countless small and medium-sized businesses, as well as some big ones. For the next decade or so, services will still generate more jobs and wealth in Africa than manufacturing, which is fine. India has boomed for more than two decades on the back of services, while steadily building a manufacturing sector from a very low base. Do not bet against Africa doing the same.

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