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Industrialize Africa

Economic Diversification

  • Industrial contribution to GDP increased by 130%
  • 35 special economic zones supported
  • 30 PPPs developed & strengthened

Africa is at the bottom of the global value chain with its share of global manufacturing at around only 1.9 percent. African economies still rely too heavily on raw commodities; between 2011-2013 manufactured goods made up only 18.5 percent of exports, while 62 percent of total imports were manufactured goods, a commercial imbalance that drains wealth away from the continent. This situation is even worse in countries where a combination of structural constraints and political instability jeopardize any effort for private sector-led economic diversification and transformation. Consequently, most countries have not created the jobs necessary to absorb the significant number of youth, compelling hundreds of thousands to migrate overseas.

To unleash their full potential, African countries must embark on a bold agenda driven by private sector-led investments in industrial transformation.

There is a real opportunity, for Africa to create jobs and promote inclusive economic transformation through domestic manufacturing and a commodity-based industrialization process, capitalizing on the continent’s resources and opportunities presented by the changes in the structure of global production. Exploiting Africa’s opportunities for industrialization involves adding value to domestic products, soft and hard commodities and developing forward and backward linkages to the regional and international value chains.

Through the Industrialize Africa priority, the Bank will address a diversity of challenges and foster value creation, formal employment and positive commercial gains, including through regional trade and enhanced balance of payments. It will support productivity enhancement through automation, quality management, improved processes and training. In line with the Bank Group’s Private Sector Development Strategy, the Bank will target improving the capacity of Africa’s producers, particularly manufacturers and related industries, to compete with imported products in local markets, and help to link them to regional and international markets. It will also support the development and expansion of SMEs, industry clusters and the establishment of private-public partnerships as a means to leverage resources for financing the industrialization process.

There is an urgent need for Africa to rapidly diversify its economies – and add value to everything that it produces. 4 Exporting raw materials only leads to vulnerabilities – and no nation or region has succeeded by simply exporting primary commodities.

- AfDB President, Akinwumi Adesina

To operationalize this priority, the Bank will launch six flagship programs to accelerate industrialization across the targeted sectors. They are: (i) foster successful industrial policies by providing policy advisory services and technical assistance to governments and funding key PPP projects; (ii) catalyse funding into infrastructure and industry projects by increasing and channelling funds into GDP catalytic programs (infrastructure and industrialization projects, by public and private operators); (iii) grow liquid and effective capital markets by improving access to market finance for African enterprises; (iv) promote and drive enterprise development by facilitating access to financing by expanding SME-focused lines of credit, providing technical assistance to SME development institutions (e.g., incubators, SME-focused financial institutions, those targeting under-served demographics such as women) and building SMEs’ capacity via linkage programs with private sector investment; (v) promote strategic partnerships in Africa by linking African enterprises and major projects with potential partners and investors through promotional activities, notably the African Investment Forum; and, (vi) develop efficient industry clusters by supporting governments in developing efficient industry clusters across Africa, through technical assistance and funding in implementation and monitoring.

The Bank’s ambition is to help double the industrial GDP by 2025, and by so doing help increase its industrial GDP to US $1.72 trillion, with overall GDP increasing to US $5.6 trillion, mainly by giving the private sector the means to effectively drive the industrialization process on the continent. This would drive tertiary sector development and reduce Africa’s dependence on commodities, and contribute to spurring inclusive growth. Over the next 10 years, the Bank will facilitate cumulative investment of US $56 billion toward implementing the six flagship industrialization programs.


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