Article

Africa from the Inside

Spotlight on Africa's trade

Africa is often touted as the last continent still to industrialise. Overall, the continent has struggled to translate its natural resource wealth into greater prosperity and higher living standards for its people. With the United Nations expecting that there will be more Africans than Chinese by 2025, the need for economic transformation is clear. 

But following a manufacturing-led growth path has been difficult. Manufacturing value added as a share of global manufacturing value added has been around 1% over the past three or so decades. The Sub-Saharan African (SSA) average for manufacturing value added as a share of GDP has declined over the past decades, and was only around 10% in 2017. 

 

Key Takeouts:

Arguably, a less fragmented and more coordinated Africa and resulting higher intra-African trade (especially by tackling NTBs and having greater access to more open markets), could have various positive spillovers. It could boost export sophistication of African economies, integrate them into regional and global value chains, build resilience to commodity price downswings, boost small and medium-sized enterprises, attract greater FDI, enhance productivity and foster innovation. 

While this cannot happen in isolation and needs to be coupled with effective export strategies, industrialisation policies and so forth, Chinese investments in industrial activities in Africa, together with the focus of a more connected Africa – both in terms of physical infrastructure rollout and greater openness to trade – could not only help address Africa’s trade imbalances but ultimately craft a more inclusive growth path for many African economies.

 

How can Deloitte help?

Through an extensive African network, Deloitte offers services across all industries, with unique capabilities and services to partner with you at any stage of your Africa expansion strategy.

 

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