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.
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.
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.
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.
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.
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.