Business

Africa: Understanding the Blueprint – How Africa Can Mimic China’s Rise As a Production Hub


The economic rise of China over the past four decades has been nothing short of extraordinary. From a primarily agrarian economy, it has transformed into the world’s manufacturing hub, earning the nickname ‘the world’s factory’. As Africa stands on the brink of its own potential economic transformation, lessons from China’s journey could provide a valuable blueprint.

Infrastructure Development

China’s rise as a manufacturing powerhouse was significantly fueled by its focus on infrastructure development. The government made significant investments in transport networks, ports, power generation, and other core infrastructure, facilitating efficient production and logistics. To mimic China’s success, Africa needs to drastically enhance its infrastructure by prioritizing investment, promoting public-private partnerships, and adopting innovative infrastructure solutions.

Industrial Zones and Special Economic Zones

China’s effective use of Industrial Zones (IZs) and Special Economic Zones (SEZs) has been a cornerstone of its industrial policy. These zones attracted foreign investment, facilitated technology transfer, and led to job creation. African countries have begun experimenting with this model, such as Ethiopia’s Hawassa Industrial Park. The expansion and effective management of these zones, learning from China’s experiences, can contribute significantly to Africa’s industrialization.

Investment in Education and Skills Training

China’s focus on human capital development, specifically technical and vocational education and training (TVET), was pivotal in creating a skilled workforce to meet industrial needs. Africa, with its youthful population, must invest in education and skills development to prepare its workforce for the future. This includes not just formal education, but also vocational and on-the-job training programs to equip workers with the necessary skills.

Balancing Foreign Direct Investment (FDI) and Domestic Industrial Development

China managed to attract significant FDI through favorable policies, providing much-needed capital and technology. However, it also took measures to ensure technology transfer and gradually developed its domestic industries. For Africa, attracting FDI is crucial, but it also needs to foster local businesses and ensure they too can benefit from technology transfer and access to international markets.

Manufacturing for Export

China’s export-oriented manufacturing strategy, combined with its competitiveness in low-cost production, was key to its success. Africa needs to identify sectors where it has comparative advantages and potential competitiveness. The recent implementation of the African Continental Free Trade Area (AfCFTA) agreement provides a unique opportunity to foster an intra-Africa manufacturing network before venturing further into global markets.