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The future of manufacturing in Africa

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Made in Africa

In the news

•

Lackluster growth. The World Bank expects economic growth in sub-Saharan Africa to decelerate to 2.5% this year, from 3.6% in 2022, according to a report released in October 2023. The region will likely experience “a lost decade of growth,” as it is forecasted to shrink at an average per capita rate of 0.1% each year from 2015 to 2025, the World Bank revealed. Slow growth is making it difficult to create jobs in an area where just one out of every six workers has a paid position. [Bloomberg]

•

West African chocolate factory. Seventy percent of cocoa beans come from Africa, but only 1% of the world’s chocolate is produced there. The “fairchain movement” calls for keeping the profitable areas of business, such as manufacturing, within the countries that supply needed raw materials. By building its chocolate factory in Ghana, one company aims to increase the share of wealth that stays in Africa. Since cocoa farming pays the least among all aspects of chocolate production, farmers typically take in roughly 5% of a chocolate bar’s final price. [NYT]

“The growing labor force in Africa will need something like 18 million new jobs a year to absorb that growth up until 2035.”

On McKinsey.com

•

Population surge. Africa’s population is set to double by 2050, and 40% of the total population will be younger than 15. Along the way, the African economy will need to add lots of jobs. A competitive manufacturing sector could play a pivotal role in helping the continent reach its full potential in the global economy. As a bedrock of a growing economy, manufacturing boosts productivity, spurs economic growth, and generates jobs, McKinsey partner David Meredith shares on a recent episode of McKinsey Talks Operations.

•

Multiplying jobs. Wealthy countries developed by building critical infrastructure, which multiplies the creation of good jobs, says Amy Jadesimi, LADOL’s managing director. “For every one job, five to 15 jobs are created as a result of that new role,” explains Jadesimi, who joined the podcast to discuss LADOL Free Zone, a special economic zone in Lagos, Nigeria, that enables global companies to operate close to the West African market. Listen to the podcast for more on the future of manufacturing in Africa.

Advance African manufacturing

— Edited by Belinda Yu, editor, Atlanta

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by "McKinsey On Point" <publishing@email.mckinsey.com> - 01:11 - 20 Oct 2023

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The complication of concentration in global trade

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The future of manufacturing in Africa

Made in Africa

In the news

“The growing labor force in Africa will need something like 18 million new jobs a year to absorb that growth up until 2035.”

On McKinsey.com