For African countries in the process of industrialization, there are still about twenty years, Mauritius depended mainly on the cultivation of sugar cane. The poverty line of this island was similar to that presented by most African countries. Since then, this African state has managed to diversify its economy, thanks to a conversion in the manufacturing industry and tourism. Mauritius has also succeeded in arousing the interest of foreign investors and thus guaranteeing its inhabitants incomes far above the average of the continent.
Africa is trying to revitalize its industries
The majority of African countries are now facing the problem that Mauritius experienced more than 20 years ago. They continue to produce and export mainly unprocessed agricultural or mineral products, while the price of these raw materials continues to fall on world markets. To overcome this problem, some of them are trying to follow the example of Mauritius, by resolutely and actively developing their manufacturing industries.
South Africa, a country that has grown from the revenues generated by its gold and diamond mines, is currently preparing new legislation to encourage companies to process ores before exporting them. In neighboring Botswana, the revival of the industrialization program can be explained by the fact that the economy cannot depend on a single product, diamonds. This is also the case for a small but growing number of African countries, including Namibia.
Africa now seems to be embarking on a new path. This is characterized by the implementation of economic reforms, a stronger desire for a multi-party system, a decline in conflicts and policies more favorable to private investment.
North Africa: upmarket industrial
The industrial transition in Morocco, Tunisia and even Egypt is taking place at high speed. Among the exports made by these countries, manufactured products, machinery and transport equipment are increasing while the textile and agricultural industries are declining.
Exports of manufactured products now represent more than 30% of total exports to Egypt as well as to Morocco and almost 40% to Tunisia. The gradual rise of industries with higher added value (chemicals, pharmaceuticals, electronics, etc.) can be seen. However, their contribution to exports remains marginal (around 5% for Morocco and Egypt and 10% for Tunisia).
To industrialize, these three North African countries have started to substitute domestic production for imports and even become exporters. This upscaling of the economy is based, most of the time, on co-production partnerships set up with a few European countries, like the development of the automotive and aeronautical industries in Tunisia and Morocco.
Between hope and disappointment: the role of entrepreneurs
Many people question the ability of entrepreneurs to accelerate the industrialization of Africa. The growth of the African continent has almost stagnated in recent years. In fact, it was 2.2% in 2016. This year is characterized by falling raw material prices, difficult weather conditions and a slowdown in the Chinese economy.
The sustained growth of African economies that do not export raw materials is a perfect illustration of the increasingly pressing need to promote industrialization. The latter being a driver for innovation, improving productivity and creating jobs.
The establishment of new industries would optimize the potential not only of the manufacturing sector but also of other sectors of activity. Technological advances combined with a favorable global economic environment can support the industrialization strategies already in place in more than 26 African countries.
Based on a collaborative strategy, they must be able to promote new opportunities to channel the high growth potential of the sectors not dependent on raw materials.
Some African regions have managed to increase their productivity by transferring jobs from agriculture to the manufacturing sector.
Beyond the manufacturing sector, other sectors such as non-farm entrepreneurship can be beneficial. Industrialization strategies provide a solid foundation from which to tap into the large pool of African entrepreneurs.
Indeed, Africa is the continent with the highest proportion of entrepreneurs. 22% of working-age Africans are increasingly starting their own business. By embarking on innovative activities, even if these involve financial risks, these entrepreneurs are at the origin of job creation. These new types of activities also involve calling on qualified employees.
Young entrepreneurs are the essential links in industrialization. Companies with less than five years and fewer than 20 employees provide the majority of jobs in the formal sector. While most African entrepreneurs (around 55%) work in low productivity sectors such as retail. To respond to this problem and encourage industrialization, bridges must be set up to allow young entrepreneurs to turn to high-productivity sectors such as processing, market services and the food industry.
Read also: https://www.afrikatech.com/fr/industry/les-pays-en-cours-dindustrialisation-en-afrique-lethiopie/