Generally, the manufacturing sector in Africa is weak – only a few countries have a solid manufacturing ecosystem. However, there’s a growing interest by governments to set up manufacturing locally, particularly after the implementation of the African Continental Free Trade Area. The agreement allows companies with better industrial development to obtain raw materials from neighbouring countries: Ghana, Ivory Coast and Senegal, for example, can support interior countries like Burkina Faso, Mali and Niger.
That’s according to Saikat Chowdhury, the managing director of NivéSal – a Singapore-based firm involved in project engineering solutions for developing countries. He’s the guest on the latest Opportunité Africa podcast, where he discusses how African countries can kick-start manufacturing locally to drive investment.
‘African governments have a strong interest in becoming self-sufficient, but there’s a need for improvement in execution and implementation,’ he says. ‘The biggest hurdles are not necessarily funding, infrastructure and manpower – it’s information. You look at India, Vietnam, Myanmar – all the developing countries of Asia – they find their own solutions, irrespective of similar problems that exist in their countries.
‘The key is to produce basic goods that citizens consume every day – things like pasta, tomato paste, noodles, toothpaste, soaps… By replacing imports with local production, which doesn’t require a significant investment, there’s so much potential for development and for building sustainable economies.’
When pressed to name three countries ripe for investment in the sector, Saikat lists Ghana, Ivory Coast and Ethiopia. ‘Ghana has a large population and potential for growth, while Ivory Coast has made progress in developing its industrial processes. Ethiopia has tremendous potential, too, but some issues related to foreign exchange and currency controls are holding it back.’
Listen to the full interview and subscribe to the podcast.