Africa's industrialization potential
Africa has long struggled to realise its unique potential, resulting in insufficient levels of industrialization and development across the continent. In the decades to come, Africa is expected to reverse this trend and become the world's new industrial powerhouse. This paradigm shift is supported by global and continental trends.
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Globaltrends
Shift from Asian powerhouses
A global shift from Asian manufacturing powerhouses is underway, driven by low demographic growth, higher GDP per capita and rising labor costs that combine to impede their competitiveness.
Supply diversification
Western countries are increasingly trying to diversify their supply chains away from Asia with the establishment of targeted trade agreements and the imposition of higher tariffs – a trend accelerated by the Covid-19 pandemic.
Climate change
A global drive to address climate change is gaining momentum, notably by optimizing supply chains and relocating industries closer to consumers and/or raw material with a key role to be played by Africa.
AfCFTA signing
Implemented on 1 January 2021, the African Continental Free Trade Area gathers 54 of Africa’s 55 countries. It is expected to have a significant impact on global trade as African countries will enjoy a stronger negotiation position to agree trade deals as one block.
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Continentaltrends
Unique endowment in raw materials
Africa has abundant primary agriculture and mining resources, but its potential to add value to raw production remains largely untapped due to insufficient local processing.
Fast-growing population
Africa has the world’s fastest-growing population which provides an abundant and cost-competitive supply of labor.
Fast-growing consumer markets
In many African countries, population growth and the emergence of an urbanized middle class is enabling the growth of local consumer markets, creating significant potential for import substitution.
Strong political drive
African Governments are increasingly implementing ambitious industrialization strategies and regional agreements to foster intra-African trade.
