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Top challenges inhibiting African manufacturing growth

The key issues restricting sub-Saharan Africa’s manufacturing sector will be unpacked at Manufacturing Indaba later this year. (Image source: Adobe Stock)

Organisers of Manufacturing Indaba, a conference and exhibition dedicated the sub-Saharan African manufacturing sector that will be running from 22-23 October in Johannesburg, have provided a list of the top issues which could restrict the industry’s growth in 2024

The conference is well placed to provide insights around this topic given that it has displayed consistent growth year-on-year. At the show, industry leaders, sector experts and international speakers gather to rub shoulders with attendees from across the continent with an ultimate aim of unlocking opportunities and encouraging the growth of manufacturing operations. The key issues identified and detailed by the organisers include:

Infrastructure deficiencies: Inadequate infrastructure remains a significant obstacle with poor infrastructure increasing production costs, hampering distribution efficiency, and reducing competitiveness in the global market.

Access to finance: Limited access to affordable finance constrains the ability of manufacturers to invest in modern technology, expand operations, and improve productivity.

Skills gap and human capital development: With a skilled workforce required to operate modern manufacturing technologies and adapt to new techniques, the skills gap facing many African countries – with educational systems often failing to provide relevant training – is a key barrier that requires vocational training and educational reforms.

Trade barriers and tariffs: Non-tariff barriers, trade restrictions, and cumbersome customs procedures impede intra-regional trade and hinder the development of regional value chains. Simplifying trade procedures, reducing tariffs, and harmonising regulations within regional blocs can enhance market access and stimulate manufacturing activities.

Political instability and concerns around security: Unrest, conflict and security challenges in some areas of the continent often creates uncertainty for investors and can disrupt supply chains.

Technology adoption: African manufacturers often lack access to affordable technology solutions and can face barriers to technology transfer and research and development investment. With limited adoption of advanced technologies, companies can lag behind in terms of productivity gains and competitiveness.

Energy access and reliability: Many African countries struggle with inadequate electricity infrastructure, leading to frequent blackouts and increased reliance on expensive backup generators. Inconsistent power supply and high energy costs pose significant challenges to manufacturing operations.

Regulatory environment and red tape: Cumbersome regulatory processes, bureaucratic inefficiencies, and corruption impede business operations and deter foreign investment.

Having laid these issues bare, the organisers noted that addressing these challenges is key to facilitating the continued growth of the African manufacturing sector, to ensure that it is competitiveness within the global sphere in the years ahead. Further, it was noted that addressing these challenges requires a concerted effort from governments, private sector and development partners in order to implement targeted policies, invest in infrastructure and human capital, promote regional integration and foster innovation. These strategies will be key to overcoming these barriers and unlocking the continent’s manufacturing potential and will be put in the spotlight at Manufacturing Indaba when it opens in Johannesburg later this year.

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