Despite possessing some of the world’s richest mineral and natural resource endowments, Africa remains the poorest continent by many development indicators. This enduring paradox reflects deep structural imbalances rooted in historical legacies that, in various forms, continue to shape the continent’s economic relationships and development trajectory. The question, which comes to mind often, remains: Can Africa change its lot?

African economies operate within legacy structures and strategies inherited from the colonial era, later reinforced by post–Second World War multilateral institutional frameworks, the cold war bipolar ideological world, and the now failing liberal pseudo-democratic world. Even the emerging multipolar world appears to be treating the continent not much different from the bygone eras before it. These systems have often positioned the continent primarily as a supplier of raw materials to global markets, limiting value addition and industrial diversification within the continent.

Throughout history, development of every economy has transitioned from poverty to prosperity through industrialization and there is no reason why Africa should remain a primary raw material supplier to the rest of the industrialized world. Africa does not even produce enough of its food when it has the largest arable land, the largest water resources and a growing youthful population that will soon be, perhaps a significantly large segment of the world’s population.

In this article, we explore the reasons behind Africa’s slow industrialisation, what can be learned from both successes and setbacks across the continent, and should it be doing to improve its lot.

Industrialisation usually starts in farms and in Africa between 60% to 70% of the population is involved in subsistence farming mostly but do not contribute much to the continent’s GDP. This is said to account some 18 % only. This indicates low productivity visa vis other continents, where agricultural production contributed much largest percentages before industrialisation took off, such as happened in East Asia or in India. 

This is resulting from underinvestment, within the continent, in Agriculture, irrigation, technology adoption, other infrastructure that could help agricultural products reach markets, beyond the close ones. Should Africa help boost agricultural production and services, it would lead to a higher productivity in all other sectors including manufacturing.

It is where Africa needs to note. It must  industrialize but not in terms of large industries such is  currently possible in other continents. Africa can, however, start with building small scale industries targeting local markets first and then the neighbors within the continent. This will work for the continent as in many ways.

In the place of a large, say semi-conductor factory, it would be possible to build a multitude of small-scale industries because of the low capital requirement of small industries, low energy supply required, and possibility of employing a larger number of people.

Africa currently exports raw materials (cocoa, cotton, crude oil) and imports the finished products (chocolate, shirts, gasoline). African can start low-level plants such as one which roasts cashew nuts instead of exporting raw cashews. This helps add value. There can be also other small-scale industries such as soap, bricks, processed foods, which can eliminate the massive cost of shipping, import taxes and sometimes port delays in various locations in the chain supply networks. This will also avoid hard currency requirements for importing basic necessities.

Africa does not have to follow the old ways of manufacturing . It can leapfrog to modern technologies mobile banking for supply chain payments. This will bypass the old physical bank presence and many other hurdles. Industrialization does not have to be the old environmentally unfriendly ways but smarter workshops using renewable energy, which the continent has in plenty such as solar, wind and hydropower.

African countries continue to remain at the lower end of global supply chains, occupying low-wage and low-skill segments. To progress, the continent must adopt new strategies that promote upward movement within these chains. While mainstream economic theory often emphasizes specialization in primary commodities based on comparative advantage, historical evidence suggests that without a coherent development strategy, this approach constrains long-term growth and structural transformation.

A clear example is Nigeria which relies on oil wealth as a major part of its economy. They have not diversified, like other countries in other parts of the world. The UAE, Bahrain, Malaysia, and other countries, for example, are all oil producing countries and have supplemented the oil wealth by building other industries. Even Saudi Arabia, the world’s largest producer of oil is currently diversifying its economy from the dependency on one product as the main source of its income.

Critically, industrialisation requires capital, but Africa does not have to start with expensive and costly industries. It has to start with low capital, transformative capabilities and producing local consumer products from the raw materials they produce. They can rely on local financings, if and when necessary and even on regional development institutions.

Africa’s industrial future is question of policy and strategy, not only on the part of governments but also on the part of the continent’s private sector. The two working together can transform the continent in ways unimaginable. This could contribute to raising the continent’s GDP from the current US$ 3.2 trillion to may be ambitious numbers like US$ 10 or more trillion in a span of a decade or even less. Africa does not need to follow the path of other continents. It can definitely learn from the success and failures of those others and chart its own path.

© Eurasia Review