Introduction

African youths are key players in energizing and stimulating various

creative means and processes that are decisive in molding our

continent into a developed and technologically-advanced region.

Development involves not only meeting of basic needs, among several

others. It also includes the development of different sectors of an

economy that will provide the necessary goods and services. These

other goals of development can be achieved through industrialization.

By industrialization, we mean the processes or approach involved in

the continuous transformation of an economy from basic productive

methods to complex or advanced manufacturing processes with the

aid of human resources and capital goods. A good example is when an

economy changes its focus from agriculture to manufacturing and

other Industries. Industrialization plays a key role in economic

development and also serves as a pathway to achieving modernization

and continual advancements of Africa and it is for this reason that

most African countries appear to be in a hurry to achieve high levels of

industrialization which will significantly influence their Nation’s

development. A carefully executed industrialization strategy will

address critical areas of economic development such as provision of

food, employment of labour, foreign exchange, advanced and

technological acquisition.

Industrialization and development work together. It is necessary to

consider a country's level of development before adopting any kind of

industrialization strategy. What works for a developed economy might

not work for a developing or underdeveloped economy because

industrialization is not complete if it is not adapted to the country's

own needs. This essay will discuss manufacturing of goods for exports

or export-oriented industrialization as the best kind of industrialization

strategy to achieve development and prosperity for Africans and it will

also highlight some problems of industrialization and it's possible

solutions in Africa and how African leaders can effectively ensure its

actualization.

Manufacturing -The best industrialization strategy to achieve continual

development in Africa

Manufacturing of export goods also known as export-oriented

industrialization is a development strategy that encourages production

for export. The African Union in their briefings proclaim

industrialization as the major strategy to promote and achieve6

inclusive economic transformation based on the African Union flagship

agenda 2063 which states that a prosperous Africa based on inclusive

and sustainable development has industrialization through the

manufacturing sector as one of the pillars of achieving this agenda

(Okerubia, 2014, Haraguchi et Al, 2019, Dinh, Clark & George, 2012).

A strong manufacturing sector has been contented to boost a Nation's

account balance externally by lowering imports and diversifying

exports which in turn leads to increase in resistance to external

factors that might impede economic growth. Manufacturing is the

surest pathway to achieve the kind of development envisioned in

Aspiration 1 of the African Union Agenda 2063. It has been the

strategy of most wealthy nations in the past century. One of the

vehicles that will propel development in Africa is a robust

manufacturing sector. The World Trade Organization has revealed that

80% of world trade involved goods while services were mostly the act

of using manufactured goods. Manufacturing is a huge source of labour

employment which is a critical area in economic development. It can

generate tens of millions of new jobs, reduce poverty and eradicate

youth unemployment providing decent jobs and enhanced inclusive

growth. This strategy helped push China into one of the world's fastest

growing economies and African countries can join them. Our continent

should no longer be a dumping ground for products from other

countries but we should strive to harness our manufacturing spirit and

promising trajectories. The availability of cheap labour and abundance

of natural resources and raw materials are added advantages. Some of

the benefits of a carefully implemented export-oriented

industrialization are discussed below:

1) Africa can become a hub for production and trading of profitable

consumer goods through manufacturing

Consumer goods refer to commodities that are produced and later

purchased to satisfy the needs and wants of the buyer. They are

divided into durable goods, non - durable goods and services. Common

examples are automobiles, furniture, beverages, auto-repair services

etc. Africa is blessed with resources and we don't need to just export

these resources and import their finished products (consumer goods)

but through manufacturing we can harness these resources whereby

we convert them into fast- moving consumer goods like electronics

and fashion products. Income generated from these goods can

contribute positively to our Gross Domestic Product (GDP) of various

African nations and will also increase our performance in the

international market. Statistics from last year showed that footwear

export in Vietnam amounted to 18 billion US dollars. African countries

can do the same. Apart from leather which is available we can also

engage in production and export of various consumer goods whose

raw materials are richly available in the continent. Consumer goods

play a vital role in export-oriented industrialization because if

implemented well they aid development significantly and with proper

governance their revenue can be reflected in the economy and the

lives of Africans.

2) It will facilitate International trade and stimulate domestic

economic activities

Research from Statista in 2019 showed that China, the United States,

Germany, The Netherlands and Japan were the world's biggest

exporters in terms of dollars. China exported $2.5 trillion in goods

which were mostly electronic, United States made $1.5 trillion majorly

from capital goods, Germany and Japan made $1.5 trillion and $705

billion respectively majorly from vehicles and the Netherlands made

$709 billion in exports. Exporting to foreign markets will help reduce

per unit cost by expanding operations to meet increased demand.

Companies and industries involved can gain new knowledge, skills and

experience that will allow the discovery of new technologies, market

practices and insights into foreign competitors. Exports can also

increase sales and profits if they reach new markets and they also

present opportunity to capture significant global market shares.

3) It will contribute significantly to economic growth

Exports manufactured are a major component of aggregate demand

(AD). Aggregate demand is the total amount of goods and services

demanded in the economy at a given overall price level at a given

time. Focusing on export-oriented industrialization through

manufacturing will help increase aggregate demand and cause higher

economic growth. Growth in exports can also have a direct effect on

related service industries. For example, the success of car exports in

Nigeria will help the local economy with local clubs and shops

benefitting from increased spending. Exports can lead to increased

investment, technological advancement and import expansion, all of

which have a direct effect on economic growth. Research shows that

Kuwait has experienced significant trade growth in recent years. Real

manufactured exports increased at an annual growth rate of 8.9% and

the real Gross Domestic Product of Kuwait increased at an average

rate of 2.3%. This research shows the how important export expansion

can significantly affect Africa's economy. Another research by the

World Bank shows that trade liberization increases economic growth

by an average of 1.0 to 1.5 percentage points, resulting in 10 to 20

percent higher income after a decade. Trade has increased income by

24% globally since 1990. As a result, since 1990, over one billion

people have moved out of poverty because of economic growth by

better trade practices. From the above research it is noteworthy that

the careful implementation of export-oriented industrialization will

lead to a surge in economic growth and will move a lot of Africans out

of the poverty zone.

The plans of almost every African country contain plans for industrial

growth. Most of the plans however, stress the lack of domestic capital

and technical know-how. Research from the African Development Bank

(AfDB) shows that the continent is well endowed with natural

resources. Africa sits on more than US$82 trillion in discovered

natural resources with the potential to contribute US$30 billion a year

in government revenues over the next 20 years. Africa is a land filled

with opportunities yet it recorded the fastest growth in import of

manufactures with an increase in it's share of world import from 1

percentage point to 3.2 percentage point over 2005 to 2014. There are

major challenges that need to be tackled decisively before

industrialization can be achieved. Some of these challenges are

discussed below:

Challenges of a manufacturing based industrialization in Africa

1) Inadequate infrastructure - A major obstacle

Africa is faced with the problem of infrastructure deficit. Preliminary

and partial African Development Bank estimates suggests that Africa's

annual infrastructure investment needs amount to at least US$100

billion. Poor energy quality alone gives rise to additional cost on

companies such as idle workers, spoiled materials, lost production,

damaged equipment and restart costs. Greater economic activities,

enhanced efficiency and increased competitiveness are hampered by

this lack of infrastructure. Inadequate transport, communication,

water and poor infrastructure impede our manufacturing capacity. The

world wants to do business with Africa but finds it difficult to access

African markets especially in the interior regions due to poor

infrastructure. Infrastructure is pertinent for the actualization of the

AU Agenda 2063. Moreover, the availability of this infrastructure will

have a direct impact on quality of life. Without infrastructure Africa

will not achieve the growth levels expected of it by 2063, it is key in

helping the continent realize it's economic potential that is needed for

sustainable development and prosperity. Export commodities like oil

and gas in some parts of Africa as well as huge demands from Asia for

some of our agricultural products and natural resources like iron ore,

crude oil, copper and coal are driving the need for infrastructure. We

need to extract and move these products to global market with

railways and seaports.

2) Insufficient education - Gives rise to unskilled human capital

Lack appropriate education is one of the major constraints Africa

faced by Africa in the manufacturing sector. The continent has only

few scientists and engineers in sectors that drive African economic

transformation. For example, the share of students in science subjects

like engineering, manufacturing and construction ranges from as low

as 3% in Burundi to only 12.8% in Morocco compared with Germany,

Austria, Mexico and Malaysia, all are above 20%. By 2060 the African
population is expected to reach 1.6 billion, more than 70% of which

will be youths. By then with just three years away from 2063 which is

the proposed timeline for the manifestation of the aspirations of the

AU agenda, the aspirations can be achieved if our abundant workforce

is endowed with the appropriate skills. Despite the high rate of

elementary school enrollment, education and training programs suffer

from low quality teaching and learning as well as inequalities and

exclusions at all levels. A newly released report by the United Nations

Development Program (UNDP) identifies the unequal distribution of

essential facilities such as schools as one of the driver's of wide

income disparities. High quality education improves the distribution of

skilled workers and nations can use this increased supply to build a

strong manufacturing sector that will be backed by advancement

through research from educational institutions.

3) Unfavourable business environment

Business is some African countries has improved significantly in

recent years. For example from consistent report the time needed to

start a business came down from. 63 days in 2005 to 27 days in 2016

and the cost of business start-up procedures of per capital gross

national income reduced from 198% to 54%. Despite the favourable

statistics; regulation, financing, corruption and insecurities hampers

growth. Access to affordable credit for our industries is a major

problem to their development mainly due to information asymmetries

for project profitability and lack of collateral or credit history,

underdeveloped financial markets and low remittances. According to

the African Development Bank, 6% of loans in Africa are short-term

and less than 2% of loans are for more than ten years making long-

term and equity financing of manufacturing industries rare in Africa.

Insecurities in some areas like the North-east region of Nigeria had

also affected businesses. Large expanse of land that are favourable for

agricultural products and natural resources are now occupied by

criminal activities or businesses are shut down due to fear of loss of

lives and property.

Strategies to tackle these issues have to be realistic and tailored to

the needs of particular countries. In other words, policies intended to

address these challenges have to be consistently implemented over a

long-term to enable sustained development. If these issues are

relatively confined, economic growth will not be unduly affected.

Ways African leaders can combat challenges in our manufacturing

sector in order to achieve development

Below are some ways through which African leaders can aid the

industrialization of the continent through manufacturing,

1) Increasing regional trade in services

The African Continental Free Trade Agreement (AfCFTA) signed by

most African countries is a great opportunity to support economic

development and industrialization in particular by promoting links

between countries especially in trade in services which will in turn

reinforce the manufacturing sector. Services like insurance, business

and transport account for up to a third of the value-added embedded in

exports and up to two-thirds of the total labour productivity growth

between 1991 and 2013. Ensuring that manufacturing firms have

access to cost-effective an efficient service inputs will have a decisive

effect on the productivity and global competitiveness of

manufacturers. AfCFTA also offers provision of efficient services over

protecting sectors. Manufacturing does not need protection, it needs

to increase its competitiveness.

2) Invest in the digital economy

Digitalization is one method African countries can leverage the

AfCFTA, increase manufacturing and generate more productive jobs. It

lowers the unit cost of production, information exchange and

transactions. Digital technologies can help African countries develop

new value chains as well as strengthen existing ones. It involves

developing targeted policies that will breach the global digital divide.

These policies will lead to digitally-advanced production, increase in

technology acquisition and boost development of African economies.

Manufacturing firms face challenges to digitalization such as high cost

of capital and electricity, unreliable power supply, high price of raw

materials, lack of relevant skills and poor customs and logistics. For

digitalization to take place policies need to not only address these

challenges but also build digital capabilities and manage inclusive

digital transformation in manufacturing.

3) Explore new financing measures to support manufacturing

Africa's development will require more effective financial resource

mobilization and innovative thinking in the way finance is influenced

and utilized. There is a dire need for major infrastructure like

construction of standard railway lines, hydro-power facilities, plants

and ports. African leaders can use development banks more effectively

to stimulate sector development and mobilize financing for investment

in industrial activities. The government can also harness public-private

partnerships (PPPs) to leverage finance, but a supportive business

environment and strong state-business relations will be needed. Good

human right practices as well as adequate protection of investors can

support efforts to attract investment.

Conclusion

Manufacturing is the key to Africa’s development as it solves major

problems like youth unemployment and reduces poverty. There will be

need for effective monitoring for it's actualization. It will also promote

industrialization of the sector, job creation and exports. African

leaders should be innovative in order to create more and better

industrial capabilities which will make it easier for Africa to advance

its manufacturing sector to hasten development and economic growth.

Africans especially youths can also assist by having solid education

which will enable the continent to compete and improve in our

production processes. Under the right scenario, our abundant

resources can be effectively harnessed through manufacturing to drive

the actualization of the development of the continent by 2063.