For industrialization in Africa, the great structural and economic changes that the world has known in recent centuries have this point in common: a technological revolution transcribed by process changes and by the search for automation of these. Growing demand and changing lifestyles have always demanded that domestic production respond, at the risk of insidious asphyxiation supported by strong imports.
Industrialization therefore seems to be this step, this “miracle” solution for the development of a country. If the proof has been made in the countries today called “developed countries”, could the so-called “emerging” or under / underdeveloped countries be inspired by it to allow more cheerful projections for the future? What about Africa in this scheme? If we accept that industrialization is the solution to accelerate socio-economic growth in Africa, where should we start?
This is the problem that we will explore through this series of article devoted to the sectors of activity to be industrialized in priority in Africa.
An Africa that believes and believes in it
Industrialization is fundamental to the economic development of a country. However, its “obvious” absence from the cradle of humanity seems to be an obstacle for African economies which remain largely dependent on agriculture and unprocessed products.
Over the past two decades, African countries have demonstrated that they can maintain a strong growth trajectory and overcome the “natural resource curse”. Despite unfavorable external factors, the latter intend to demonstrate that they are able to adapt to the fall in commodity prices and generate sustainable and inclusive economic growth by diversifying their economy, boosting productivity and adopting pro-poor policies.
Industrialization would therefore come as a response to the “limits” observable today in Africa. A question arises, however: which sectors to industrialize in priority?
Let’s explore the food industry.
No region in the world has ever industrialized without transforming its agricultural sector. Africa needs agrifood industries. For African economies, agriculture would be the key to accelerating growth, diversification and job creation. This sector alone accounts for 16.2% of the continent’s GDP and provides work for more than 60% of its population.
Akinwumi Adesina, the president of the African Development Bank (AfDB) recalled, via La Tribune Afrique, the strategic challenges of the agricultural sector for the industrialization and development of African countries. African agriculture has tremendous potential, especially in terms of investments. African companies and investors must seize this opportunity and unleash this potential for Africa and Africans.
Africa should start by treating agriculture as a sector of commercial activity and draw inspiration without further delay from experiments carried out elsewhere, such as in Southeast Asia whose rapid economic growth was based on an agrifood industry and strong agro-industrial.
In practice, this would be to stimulate growth in the sectors and areas in which poor people live and work. It should be noted that the productivity of the agricultural sector remains largely insufficient despite the resolute commitment of African countries to change the situation. It is therefore essential to support smallholders by giving them access to modern technologies, adapted financial services and better access to markets.
To boost agro-industrialization, the African Development Bank will invest $ 24 billion in agriculture and the agrifood sector over the next ten years. This is 400% more than the current level of funding which amounts to $ 600 million per year.
Lack of infrastructure increases the cost of economic activity, discouraging agrifood companies from setting up in rural areas. To remedy this, it is possible to create agro-industrial zones and food crop processing zones in rural regions. Combined with improved infrastructure, roads, water and electrical installations, and even suitable housing, these zones will reduce operational costs for private companies in the agrifood sector.
This will create new markets for farmers, increase economic opportunities in rural areas, stimulate employment and attract domestic and foreign investment.
Considered a flagship destination by investors, the African continent would benefit from reducing its infrastructure deficit, to support industrialization. A gigantic task that is expected to cost $ 93 billion a year over the next decade. The project concerns roads, access to information and communication technologies and electricity. This last point is an important challenge on the continent. Frequent power outages would cost the African economy between 1 and 4 percentage points of GDP.
Today, sub-Saharan Africa suffers from its lack of integration into world trade. Its freight trucks are not very fast and its large ports are constantly congested. However, the increase in trade volumes would favor the increase in container traffic by an average of 6 to 8% over the next thirty years according to the African Development Bank.
At the moment, the absence of industry leads to a significant shortfall as illustrated by the example of cocoa: West Africa produces and exports 65% of cocoa beans in the world. The reason is simple, this area does not transform them, it only benefits from 3.5% to 6% of the final price of a bar of chocolate.
The agriculture and agri-food sector could, however, represent close to $ 1 trillion by 2030.
Sub-Saharan African states, especially east of the continent (Kenya, Ethiopia, Rwanda, Tanzania, etc.) are developing their industrial models. For example, Kenya is now the world’s third largest exporter of cut flowers. An activity that employs more than 500,000 people. And this sector exported 135,601 tonnes in 2014 according to the National Bureau of Statistics of the country. The improvement and acceleration of processes, the industrialization of such an activity could increase these figures, in particular thanks to significant productivity gains.
Digital as a springboard for the industrialization of Africa?
While developing its industrial capabilities, Africa should, however, prepare for the future of digital by investing in the internet, digital technologies and skills related to innovation. The digital revolution could indeed lead to the relocation of certain productions.
According to a study by the London think tank Overseas Development Institute (ODI), robots (including finance and operation) in the furniture industry in the United States will be cheaper than the employees of a Kenyan factory in the same industry by 2033 (and between 2038 and 2042 for Ethiopia).
Time is therefore running out to train African scientists, technicians and engineers, to allow them to tie in with the fallout from industrialization in Africa and make the most of its potential.
read also: https://www.afrikatech.com/start-business/what-is-industrialization/
Other article: https://issuu.com/africandevelopmentbank/docs/industrialize_africa_french_final_w