China can partner with Africa to develop the manufacturing sector.

By George Nsamba

Africa has been importing manufactured goods for the longest time in history. What is amazing is that Africa is endowed with sufficient manpower, raw materials required for manufacturing and ample space where industries/factories can be set up. The question rises why Africa cannot utilise these competitive advantages to develop its own manufacturing sector to maximise on the resultant advantages.

Without going into much detail, the advantages of developing own manufacturing sector are numerous. Manufacturing is a definite stimulus for economic development as has been demonstrated by several Asian countries. Africa has many unemployed youth and in many African countries the figures are in double digits. Development of the manufacturing sector is a sure way of reducing the unemployment figures which are skyrocketing in many countries on the continent.

Sadly though, there are a few countries in Africa like South Africa, Egypt, and Nigeria where manufacturing has been part of the economy but in all these places, manufacturing seems to be dying out. Some African countries are blaming cheap imports as the main cause of the disappearing manufacturing capability.

Blames aside, Africa needs to develop the manufacturing sector as a matter of urgency. The African Union Agenda 2063 has identified Science,  Technology and Innovation (STI) driven manufacturing/industrialisation and value addition as goals in transforming economies. This needs to be operationalised quick enough to generate the required impact in Africa.

According to the United Nations Industrial Development Organisation, Africa contributes only 1.5% of the total world manufacturing output and ranks last when compared to other continents where Latin America contributes 5.8%, East Asia contributes 17.2%, Asia and Pacific contribute 21.7%, North America 22.4% while Europe contributes 24.7%, while others contribute the remaining 6.7%. This contribution is pathetic given that Africa is the source of most raw materials used in the world manufacturing sector.

Ghana and west Africa in general plus the Democratic republic of Congo produce vast amounts of logs of timber which are sold on the world market. Sadly though, these countries still import wooden toothpicks and domestic furniture rather than manufacturing them themselves for self-use and export.

South Africa has been having a thriving manufacturing sector which has been a source of employment for many, but it too is disappearing at an alarming state. A case in point is the state of the Iron and steel manufacturing where South Africa was one of the leading manufacturers. According the South African Iron and Steel Institute secretary-general Charles Dednam, in March 2020, Manufacturing’s contribution to the South African GDP dropped by 44% from 24% in 1990 to 13% in 2018, but steelmaking remains a key strategic industry for South Africa, representing 1.5% of the country’s GDP and accounting for 190000 jobs.

It is high time Africa learnt from the best. China’s manufacturing sector is quite developed and contributes tremendously to the country’s economic development. China has demonstrated in many forms that it is a willing partner to African development through both financial assistance in infrastructure development as well as in being ready to give expert advice.

The recent launched African Continental Free Trade Area (AfCFTA) in March 2018,  could be a stepping stone towards the development of this manufacturing sector but individual countries need to show more enthusiasm in revitalising their manufacturing sector by starting with production of basic household goods. Why should African countries import fruit juices when natural fruits are grown in large quantities only to end up in the dumpsites as rotten products rather than manufactured products?

China has the expertise in manufacturing as well as experience in manufacturing various products ranging from food products, textile as well as electronics. Africa has the raw materials that are used in the manufacturing industries to produce several household products as well as other manufactured products. It is this synergy between Africa and China that needs to be exploited by the African countries to develop Africa’s manufacturing sector.

Africa needs to forget blaming import of cheap manufactured products as the reason local manufacturing is either slowly diminishing or non-existent. It is Africans who decide to import these products after all, and I am not convinced that anyone forces any country to import cheap goods.

It is high time Africa utilised new and modern technologies to revamp its manufacturing sector which will be more efficient and cost effective so that the goods produced are market competitive.

The market in Africa is available starting with local populations and if more is produced for export purposes, inter Africa exports also offer quite a wide market.

A few countries in Africa are known to have started working on improving the manufacturing sector for example Ethiopia, Rwanda, Morocco and many more are still trying but a higher level of improving the manufacturing sector is urgently required to alleviate youth unemployment, increase economic growth and reduce poverty levels.

China has done it; it has experience and expertise in manufacturing that Africa can borrow from and the relationship between China and Africa needs to yield fruits in this regard.

George Nsamba is a specialist in risk management and auditing based in Johannesburg South Africa