BY MURIEL KGOMOTSO GILL

Introduction

Africa is undoubtedly richly endowed with mineral deposits. This being the case, it should be among the top rich countries in the world, but sadly, the reality is quite the opposite. Among other things contributing to this, is the fact that African countries receive pitiful amounts for their raw resources. Some African leaders are trying to change this, and this should increase their gross domestic product (GDP) and speed on development.

In the past, western countries have tried to help Africa by building infrastructure, but then left them with inflated bills that crippled them further. Then they built social infrastructure like hospitals and schools, but these are not inputs to economic development. Now China is helping many African states build transportation infrastructure, which is a direct input to industrialization and economic growth. Perhaps this is a step in the right direction.

Industrialization in Africa

Industrialization is known to create sustained jobs, increase productivity (something that African economies need, as evidenced by the low GDP per capita), contribute to economic growth, accelerate economies into middle and high income levels, contribute to economic transformation and create many rich individuals. Despite this, many sub-Saharan African (SSA) economies are documented to be under industrialized.

Opportunities in Africa

The fact that SSA economies are under-industrialized means that they mostly import the stuff they need for daily living. This makes them an extended consumer market for an industrialized economy that exports to them. This robs their economies of the opportunity to grow, increase per capita GDP, create jobs that will fight unemployment and poverty.

At the present moment, it is recorded that 60% of farm produce in Africa goes to waste, causing farmers their income. This spells a shortage of value adding processing, cold storage and food drying facilities. Most west African countries produce and export cotton, this spells opportunities to process it further into fabric and all the spin-off opportunities that can come from this. About 4 African countries (Ghana, Ivory Coast, Nigeria and Kenya) are the main producers of coconut. There are a wide range of products; from health and edible to skin care cosmetics, that can be produced from this product. The same can be said about avocadoes (Kenya, Ethiopia, Malawi, Tanzania and South Africa). There about 20 different uses of avocado seeds that are under explored, with the potential to create wealth. West African countries have shea butter, which is a highly sought after product in western cosmetics, but because the locals are unaware of its value, they paint their mud houses with it to prevent them from soaking up water and collapsing. A little information and proper industrial processing can earn them decent money from their produce, that can allow them to build their families proper bricks and mortar housing and continue to get good decent money from their yearly produce. They just need proper partnerships.

The essence of this paragraph is to highlight opportunities in primary agro-processing, and local comparative advantage opportunities that exist in each region of SSA, or even Africa as a whole. The other example of unique comparative advantage is argan oil, only found in Morocco and western Algeria. It is another highly sought after product used in high end cosmetic products. Because of its premiere use and demand, and scare availability, the people of these regions should be getting decent money for their product, and/or adding value to their product and exporting finished products to get even better money. They can either export their products or trade among themselves in Africa, a possibility that is near reach, with African Continental Free Trade Area (AfCFTA) gaining momentum and road infrastructure being put in place to facilitate this.

Proposed solution

For industrialization to take full effect, it needs a concerted government policy and provision of infrastructure. Egypt is one of the African countries that seem to be getting this one right, they are investing a sizable amount of money to build factories. In the absence or slow pace of this elsewhere, it does not mean that all is doom and gloom. There is a great contribution that the collective will of entrepreneurs can achieve. Many can start small; what is often called proto industrialization. In fact, reports state that Africa never finished this stage. This is, in the absence of factories, there are a mushroom of backyard workshops, where entrepreneurs start small.

It is possible because China is producing small manufacturing machinery, that make this not a very expensive exercise. However, for someone who does not have the capital to start, it can be both expensive and daunting. This is where the NPO hopes to provide basic training in costing, accounting (and providing templates), materials and inventory management, marketing and sales, etc. and then match up these entrepreneurs with the investing diaspora. The favorable currency exchange rates make it affordable. The two parties become business partners, while the investing diaspora are also required to be mentoring partners. Envisaged business areas will be in agro-processing and small consumer goods manufacturing.

Benefits of the solution

• There is little competition due to low industrialization, therefore the chances of success are high.
• The diaspora diversifies into another foreign market, thus protecting their investment, especially in the current global uncertainty, and the centers of power seem to be shifting, which could have a negative effect on some western currencies.
• It provides the satisfaction of contributing to African development, including mentoring an African entrepreneur, and possibly creating long-lasting meaningful relationships.
• It helps to transition many from unemployment to middle- or high-income earners, eradicating poverty.
• It contributes to economic development, raise productivity, and GDP.

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About the author

Muriel Gill is the founder of Africa Accelerated Economic Development (AAED), a NPO that seeks to promote agro-processing and small consumer goods manufacturing across sub-Saharan economies, to grow economies, create jobs and fight poverty.

Muriel has also authored an e-book where she expounds on the strength of SMEs.

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