For decades, Africa has been viewed as a consumer economy as most of the goods that are used on the continent come from other parts of the world. Manufacturing is a major pillar of any economy and if Africa is to become the economic giant that it can potentially be, the manufacturing industry needs to grow and expand quickly over the next couple of decades. According to a report by Prof. Landry Signé, African business to business spending related to manufacturing is expected to reach $666.3 billion by 2030, a sign that there is growth within the African manufacturing sector.
By Kudzai Joshua Zawe
Why is Manufacturing Important to Economic Growth in Africa?
There are several reasons why becoming a manufacturing economy is vital to the growth of any economy across the world. In the context of Africa, there is one key area that is important to look at. Africa is a holder of most of the natural resources and raw materials that are used in manufacturing industries around the world. For example, it is estimated that about 30% of the world’s mineral resources are located in Africa. If the raw materials and resources that are being used for manufacturing are being accessed locally, it makes the manufacturing process cheaper, faster, and more efficient.
The ability to move from being a consumer economy to being a producer of goods can potentially shift the world economic tides in Africa’s favor. Goods manufactured on the continent will be better placed to solve the challenges being faced by African consumers as they would have been developed with the African market in mind. Growing the industry also leads to the creation of job opportunities in a number of industries. From research and development to line workers and the export industry, there are several job opportunities that can come out of vibrant manufacturing industries. Statistically, manufacturing industries lead to more economic activity than any other sector of the economy.
Startups in the Manufacturing Industry
Africa’s manufacturing sector is home to some economic giants that have been the source of livelihood for millions of families. However, if the industry is to reach its true potential, startups have a major role to play. There is a lot of growing interest in African startups, and this interest has translated into growing investments being funneled into startups on the continent. The manufacturing industry is no exception to this and an estimated $1 billion has been invested in manufacturing startups. This figure will continue to rise as more investors look to enter the industry through startups that are building innovative ways of delivering products to the market.
One of the startups that have become industry leaders in the manufacturing industry is KAS Africa. The company works as a contract manufacturer for various goods across the home, baby, and personal care industries. KAS ensures that its clients receive the highest possible quality of products through thorough research and testing of the products before they enter the market. This process guarantees consumers that the products they end up with are of the highest possible quality and that these product designs have come to be through high levels of research. Good research leads to the development of good products, and research being at the center of the work that KAS Africa does means that they are almost certain to build the right products for the market.
KAS Africa is one example of a startup that is working towards building a better manufacturing industry in Africa. It is imperative that governments across the continent develop policies that stimulate the growth of industries and encourage trade among African countries. This industry has the potential to stimulate economic activity that can translate into the general growth of the African economy.