Towards Sustainable Industrialization in Africa: 3 Essential Pillars
During the Fita 2024 event, Olivier Stoullig, Head of Industrial Policy at the African Development Bank (AfDB), highlighted the integrated approaches necessary to stimulate industrial development in Africa.
Stoullig emphasized that industrialization requires a comprehensive and coherent approach, combining various policies and involving multiple stakeholders, including financiers. This perspective underscores the importance of synergy between the public and private sectors to succeed in this vast project.
Africa is a continent with varied realities, reflected in the different industrial strategies adopted by states. Some countries favor SMEs, while others support large industrial groups or focus on specific sectors. Stoullig cited the example of Gabon, which focuses on certain industries, illustrating the diversity of national approaches.
The fact remains: Africa lags behind in industrial development globally. In 2023, the continent accounted for less than 2% of global manufacturing production. Olivier Stoullig recalled that the share of manufacturing value in Africa's GDP decreased from 17% in 2000 to 12.4% in 2023, far below the global average of 16%.
This stagnation is explained by various factors, including a lack of endogenous capacities and excessive dependence on foreign production, exacerbated by recent crises. "Recent crises have highlighted the urgency of developing the manufacturing sector to reduce vulnerabilities created by this dependence," he added.
Since its creation, the AfDB has strived to contribute to the industrialization of the continent. In 2016, a strategic shift positioned industrialization as one of the five main pillars of the AfDB. This strategy is articulated around six flagship programs, including the development of industrial policies, financing of infrastructure projects, and the creation of clusters and special economic zones.
These initiatives aim to strengthen the competitiveness of value chains, develop industrial zones, and encourage public-private partnerships. However, Stoullig acknowledged that financing remains a major challenge, requiring substantial investments that African countries often lack the resources to provide.
To address this financing gap, the AfDB proposes a range of financial instruments targeting a broad range of beneficiaries. These instruments include financing large groups through private windows, supporting industrial infrastructure through sovereign windows, and assisting SMEs through re-lent loans through local banking institutions. "There is no single solution, but a holistic approach is necessary to have a significant impact on the continent," Stoullig concluded.