A report by the United Nations Conference on Trade and Development (UNCTAD) has highlighted Africa’s vast potential as a hub for manufacturing investment. The continent’s rich reserves of critical minerals and metals, such as aluminium, cobalt, copper, lithium, and manganese, make it an attractive location for technology-intensive industries.
Africa’s abundant resources and expanding consumer markets position the continent to play a significant role in global supply chains. By leveraging these advantages, African economies can diversify their production locations, reduce reliance on external markets, and boost economic resilience.
According to the report, Africa offers several competitive advantages, including:
- Shorter and simpler access to primary inputs
- A young, technology-aware, and adaptable labour force
- A burgeoning middle class with growing demand for sophisticated goods and services
By creating an environment conducive to technology-intensive industries, Africa can raise wages, currently set at a minimum of $220 per month, compared to an average of $668 in the Americas. Deeper integration into global supply chains will also diversify African economies, enhancing their ability to withstand future economic shocks.
Diversification by firms present a New Era of Economic Growth
As global manufacturers seek to diversify their production locations amidst trade turbulence, geopolitical events, and economic uncertainty, Africa is poised to emerge as a prime destination for investment. With its abundant resources, growing consumer markets, and competitive advantages, the continent is ready to unlock its full potential and embark on a new era of economic growth.
Seventeen African countries, including Angola, Botswana, Ghana, and South Africa, have already implemented local content regulations to support the growth of local supply chains, foster technology transfer, create jobs and add value within their borders.
Additionally, African countries should also secure better mining contracts and exploration licences for metals used in high-tech products and supply chains. This would strengthen domestic industries, enabling local firms to design, procure, manufacture, and supply the necessary components.
