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Africa in search of its industrialization model

20/12/2019
Source : Les Echos
Categories: Companies

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Despite sustained growth, the African continent still lags behind Latin America and South Asia.
Southeast in the manufacturing industry.
But the digital revolution opens up a huge field for small production units to better hold
account of the specificities of the 54 African countries.

If the economic prospects in Africa traced by the African Development Bank (AfDB)
show a general and continuous improvement in the economic performance of the continent, with a
gross domestic product (GDP) expected to increase by 4% in 2019, after 3.5% in 2018 and in 2017, for 4.1%
expected in 2020, this same AfDB affirms, in its 2019 report, that "Africa must industrialize".

The emergence of a middle class on the Black Continent, described by numerous studies, and the example
of the few rare countries, out of the fifty-four in Africa, which, like Nigeria and Ethiopia,
derive a modest added value from their manufacturing industry, it is the trees that hide not the forest...
but the desert. “Today, African industry generates only $700 of GDP per capita on average,
that is to say 3 times less than in Latin America, and about 5 times less than in East Asia", can we read in
a study just published by European management and technology consulting firm BearingPoint
under the title "Industry in Africa, the reasons for a revival".
A title tinged with optimism as the observation made can seem hopeless. “If the industry represented 31%
of GDP in 1980, it now only contributes 25% of African GDP", it is thus written
in this report by Jean-Michel Huet, partner in charge of Africa and international development and
coordinator of this study, and his teams. The liberalization of world trade has exposed the
local businesses to increased competition from imported products.
In addition, the handicaps that weigh on the development of a manufacturing industry in Africa are
legion: economies essentially based, for some, on raw materials, for others,
on agriculture with catastrophic productivity; limited investments due to a large
legal, fiscal and monetary instability; or again, a workforce oriented towards low-cost services
productivity level.
But, for Jean-Michel Huet, who has around forty consultants assigned to African or
operating in Africa and double that of BearingPoint offices involved in African cases,
the continent does not lack assets. At a time of global warming, it is, he stresses, "the safest
in the world regarding the risks associated with natural disasters, earthquakes, typhoons, tsunamis…”
Dangerous areas are certainly not lacking, but they are mainly concentrated in the strip
Sahelian and in the most landlocked regions.
Elsewhere, urbanization, population growth with, by 2025, "the youngest workforce
and the largest in the world", natural resources with 60% of the planet's arable land,
diffusion of new technologies with half a billion mobile broadband connections in 2020, i.e.
twice as many as in 2016, are all catalysts for an "augmented industry", according to the formula of
Bearing Point.
New technologies
The cabinet has developed 4 scenarios for the industrial development of Africa in the next thirty
years (see graph). The first simulates a simple correlation of population growth to
economic growth. The second, "As is African", identifies identically the series of thirty years
1985-2015. The third applies to Africa the industrial explosion of the period 1974-2004 in South Asia.
South East. Finally, the fourth, “augmented industry”, is the one chosen by the experts at BearingPoint. "
It is ultimately the best, it requires time and investment but makes sense soon enough thanks to the rapid impact
digital,” they write in their report.
For Jean-Michel Huet, digital and new technologies favor agile models, "with
mini-factories that make it possible to manage the specificities of the continent”. The African e-commerce leader, Jumia,
He also sees an opportunity there (see opposite). “We really want to be part of this
movement", underlines the co-founder and co-director of the group, Sacha Poignonnec, according to whom "we do not
count the number of our salespeople (40% are women, 60% young people) who started in
trading and eventually developed a brand. But this one agrees, there's still one
a lot of training work to be done to convert Africans to industry.

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