According to Li Yong, the Director of the World Industrial Development Organisation (UNIDO), Africa remains a weak link in today’s global economy. He further writes that the world will not achieve the United Nations 2030 sustainable development goal unless Africa achieves rapid and responsible innovative industrial development. This requires the promotion of technology and innovation in the industrialization process.
Africa has the potential and a perfect opportunity of becoming the global economic powerhouse but needs investments in manufacturing industries. This point has been emphasized in international fora such as the Sixth Tokyo International Conference on African Development as well as the G20 summit in China held one month after the Tokyo conference. Clearly, the conversation about Africa is changing from one of deficits and gaps to opportunities, ventures, prospects, and creativity. Some key indicators of the industrial investment opportunities in the continent are discussed below:
The fall of trade barriers
African countries have worked towards the elimination of barriers to trade. Various free trade areas such as the EAC and ECOWAS have been operational for some years making it possible for goods manufactured in one country to be sold across the borders within member countries without restrictions. Of interest is the creation of a continental free trade area where goods can move freely within the entire continent. That means that an investor producing goods in one country will have the benefit of supplying the vast market.
The increase in middle class consumers
The Africa has the fastest growing middle class in the world. The group is made up of educated, urban professionals who are brand sensitive. They are also sophisticated in their consumption. This creates a perfect market for investment in innovative industrial products that will cater for their consumption needs.
African countries have realized the need to foster industrial investments noting that commodity-reliant economies are not sustainable. The governments are establishing industrial parks and other free economic zones where you can invest under concessional terms including tax exemptions. Additionally, the countries are heavily investing in infrastructure to provide better investment environments. Mass electrification programmes in several countries and development of transport infrastructure point to the shift in governments’ priorities. Additionally, most countries have established investment promotion agencies that help foreign investors with registration of companies and tax advisory.
GSMA has found that Africa leads the world in adoption of mobile technology. This offers a great cross sectional economic opportunity as the increased financial inclusivity is good for investments.
The potential to lead in sustainable development
Africa has the opportunity of looking at what works best elsewhere and appropriately fashioning its development in technology, energy, supply chain design among others. This rare chance of adopting the best systems from the word go makes Africa an attractive investment destination.
The need and opportunities for industrial investment in Africa has already been noted. For example, the Democratic Republic of Congo is one of the two countries in the world hosting the Aqua Telecom Industry 4.0 programme by DT X. The programme is being piloted with the aim of spreading the same model to other developing countries with a view to attracting large inward investments.