Hi, Quartz Africa readers!
Making it up
Manufacturing isn’t very often near the top of the list when it comes to the development discussions around Africa these days. It hasn’t been forgotten, it’s just not seen to be as exciting as mobile apps, artificial intelligence and machine learning. Needless to say, modern manufacturing features some of these newer technologies.
The future of African manufacturing is the subject of a report out earlier this month from Washington DC think tank, Brookings, which examines the potential for Africa’s combined economy if this key part of the continent’s industrialization ambitions is ever to be fulfilled.
In terms of growth, manufacturing in Africa is performing well in aggregate and expected to do even better. Manufacturing is reported to have grown by an average 3.5% a year between 2005 to 2014, faster than any other region in the world. The authors says some countries like Nigeria and Angola have seen an increase in output of some 10% a year. Manufacturing attracted 22% of foreign direct investment in 2015.
Brookings, McKinsey and others like the African Development Bank seem to agree African manufacturing’s best long-term return is from domestic demand (regional) rather than only being focused on exports beyond Africa’s shores.
Yet there are also concerns that, by some important metrics, manufacturing is not delivering as hoped. For one thing, 70% of the continent’s manufacturing activities is found in just four countries (South Africa, Egypt, Nigeria, Morocco). Africa lags far behind the rest of the world in terms of manufacturing value added (MVA). Last year, sub-Saharan Africa’s MVA was just $145 billion, much lower than developing countries in East Asia which are closing in OECD members levels. Perhaps, unsurprisingly, much of the region’s industrial production remains centered on resource-based manufacturing—about half of total MVA and manufacturing exports.
How do countries generate more value from manufacturing? Many of the obstacles are the same as most other sectors, improving the quality of the labor force, power, transport logistics and tariffs and the overall regulatory environment.
It’s worth the long-term investment. McKinsey predicts the sector’s output will double in size to $1 trillion a year by 2025 and create 14 million “well-paid” jobs. This optimistic estimate depends in part on all 55 countries joining the Africa Continental Free Trade Area (ACFTA) agreement creating the world’s largest free trade agreement with over $4 trillion in combined consumer and business spending.
— Yinka Adegoke, Quartz Africa editor
Stories from this week
African fashion brings sustainability to the runway, but can it scale up and stay green? A new generation of designers is already adapting traditional African techniques and locally-sourced materials to create fashion that’s both green and fair. Yet, most niche African brands remain small operations, despite their global potential, writes Lynsey Chutel.
The bittersweet pain of Anthony Bourdain’s final program celebrating Kenya. The first episode of the final season of Parts Unknown will be the last time audiences hear legendary chef Anthony Bourdain’s trademark growling voice. It was the last voiceover he recorded. In the episode, he delights in Kenya’s food, diversity, and culture, emphasizing how the nation is “phenomenally beautiful.”
Africa’s largest e-commerce player is mulling a billion-dollar IPO. Jumia has spent the last decade helping build e-commerce markets in several African countries and has been racking up tens of millions of dollars in losses as it’s done so. Now, it is looking at returning some value to its investors and owners via a public listing on the London Stock Exchange for $1 billion.
Blockchain technology could improve transparency in Africa’s commodity market. Chinese billionaire Bruno Wu has a plan to use blockchain technology to improve transparency and eliminate corruption in Africa’s commodity markets. Digitizing asset production and distribution could help the continent to lead just as it has with mobile money worldwide.
Economists have been severely underestimating the value of intra-African trade. When economists and other researchers look at Africa’s trade patterns between countries they often overlook the informal trade that goes on across borders—an average of 30% to 40%. This unawareness has implications for policymakers, particularly international partners.
Nigerian travel startups are getting millennials to pick local tourism over vacations abroad. Travel startups in Nigeria are finding success getting young middle class Nigerians to visit the country’s under-appreciated tourist attractions. By facilitating thousands of trips, startups are also curating up-to-date data in an industry where accurate information is historically scant, writes Yomi Kazeem.
Chart of the Week
Africa’s most ambitious companies are winning by going pan-African . The African Development Bank says hundreds of homegrown firms are betting on the continent through expansion plans, training local talent, and building private-public partnerships, writes Abdi Latif Dahir. The result: more returns, impact, and integration.
Other Things We Liked
Consolation philosophy and the struggle of reason in Africa. African philosophers often find themselves stuck trying to convince both Western and African audiences that their outlook is valid and relevant. For Aeon, Nigerian scholar Ada Agada details how ”consolation philosophy,” a school of thought focused on the human experience which synthesizes the roots of traditional African philosophy—wonder and frustration—for modern times, could be the answer.
African universities need their own China expertise. There is growing censorship with China’s academic circles and there’s a chance it’s seeping into Chinese-funded academic programs in Africa, writes Ross Anthony in University World News. Many programs in African universities are linked with Confucius centers, which are controversial for their lack of independence. African universities should invest in their own Chinese studies programs in tandem with China’s, writes Anthony.
ICYMI
History in Africa is looking for an editor. Cambridge University’s peer-reviewed academic journal which publishes original research and essays on African history is looking for an editor or team of editors to oversee the publication from 2020 to 2025 (Oct. 1).
World Bank’s Africa fellowship for recent doctoral graduates or students. Those picked will be granted a six-month fellowship either at the World Bank’s offices in Washington DC or at in-country offices to gain experience in research, economic policy, technical assistance (Oct. 5).
The 2019 Young African Leaders Initiative. Over 700 Africans between the ages of 25 and 35 will undergo academic and management training in the United States to boost their engagement in civic, business, and public leadership (Oct. 10)
Keep an eye on
Melania Trump to visit Africa (Oct. 1). On her first solo African trip, US first lady will head to Ghana, Malawi, Kenya, and Egypt to see out how officials are dealing with issues confronting children.
Future Energy Africa (Oct. 1-3) Key officials in Africa’s gas, energy, and power generations sectors will gather in Cape Town to discuss the future of the continent’s “fast-evolving energy value chain.”
*This brief was produced while listening to Four African Women by Somi (Rwanda/Uganda)
Our best wishes for a productive and thought-filled week ahead. Please send any news, comments, suggestions, best sustainable African fashion and Bourdain in Africa memorabilia to africa@qz.com. You can follow us on Twitter at @qzafrica for updates throughout the day.
If you received this email from a friend or colleague, you can sign up here to receive the Quartz Africa Weekly Brief in your inbox every week. You can also follow Quartz Africa on Facebook.