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Study Notes

Previous McKinsey research estimates African firms could increase export revenue by over $100 billion by 2025, with three-quarters coming from advanced manufacturing products.
Labor-intensive goods, such as apparel, offer an opportunity for countries to industrialize economies and create jobs, with Vietnam and Bangladesh adding over 8 million manufacturing jobs between 2000 and 2014.
China's labor cost advantage is eroding, and some African countries have seen rapid growth in labor-intensive manufacturing exports, with Tanzania and Ethiopia achieving 9% and 12% annual growth, respectively.
The "flying geese paradigm" suggests manufacturing companies move from high-cost countries to low-cost ones, helping the follower country industrialize and eventually become a leader.
Investor and founder of Roha, Brooks Washington, emphasizes risks involved in expanding manufacturing in Africa, including access to land, capital, and power supply.
Vera Songwe, executive secretary of the United Nations Economic Commission for Africa, highlights the challenges of getting land and reliable electricity supply as major obstacles to industrialization.
Industrial hubs, such as Hawassa, can help overcome power supply challenges by attracting private energy investment, freeing manufacturers to focus on their core business.
Skills development is a critical challenge for Africa's industrialists, with both private-sector firms and national governments needing to invest in vocational training programs to build industry-relevant skills.
Performance improvements and enhanced management training are necessary for African manufacturers to compete on a global stage.
Nairobi, known as "the green city in the sun," has roadsides filled with informal nurseries selling various flowering plants.
Modern commerce thrives in Nairobi with the presence of numerous shopping malls from local and international investors.
Global retailers like Carrefour, Choppies, and Shoprite have expanded into Nairobi, while e-commerce sites Jumia and Kilimall are popular.
Africa's transitioning households require companies to consider their long-term needs, not just present consumption.
Chinese consumer market development serves as a useful analogy for understanding African consumer trends—from food and essentials to luxury goods and services.
Hawassa, Ethiopia, is home to a new industrial park producing for global brands, using renewable energy and creating local jobs.
Ethiopia's apparel exports have grown significantly, making it a significant manufacturing exporter.
International competition and local demand growth suggest a large-scale manufacturing opportunity in Africa, potentially replacing "Factory China" as labor costs rise.
Africa currently imports much of its consumption, creating potential to expand local industry and meet growing local demand in various sectors.
Lions on the Move research reveals an opportunity for Africa to double its manufacturing output to nearly $1 trillion by 2025.

Description

Learn about the growth potential of African manufacturing and its impact on job creation. Explore the opportunities in meeting intra-African demand, substituting imports, and accelerating niche manufacturing exports.