ANALYSIS | When “Made in Africa” becomes a balance-sheet reality

Africa's manufacturing potential is set to transform into sustainable industrial growth only when ambition morphs into commercially viable, operationally executable, and financially bankable realities. The African Development Bank's 2025 Africa Industrialisation Index reveals that Africa's manufacturing value added has risen steadily, reaching an estimated USD 351 billion in 2025, up from USD 285 billion in 2020.

However, Africa still accounts for less than 2% of global manufacturing output and only 1.4% of manufactured exports. South Africa, once leading Africa's industrialization ranking, now falls to the bottom for the first time since 2010. The manufacturing conversation must shift from whether the continent can build factories to whether African-made products can compete in terms of cost, quality, delivery, and resilience at home, across the region, and globally.

This shift is not a policy problem that needs another strategy. Africa possesses an abundance of industrial master plans, natural resources, and a large market potential, including a young workforce, expanding consumer markets, and one of the largest single markets in the world within the African Continental Free Trade Area. The pivotal factors determining whether this potential becomes sustainable growth are execution, financial bankability, and competitiveness.

Execution hinges on enablers that underpin every factory, such as reliable energy and water, efficient logistics, predictable regulation, and consistent implementation. When these factors align, manufacturers can plan with confidence, price competitively, and build scale beyond domestic markets. Conversely, when these elements falter, even well-capitalized projects falter.

Veronica Lukwago, Associate Director at BDO South Africa, asserts that winning a manufacturing contract depends not solely on the factory's capabilities but on the functioning of the entire value chain, including roads, power, water, and logistics. The opportunity lies in the interplay between Africa's existing production and its potential to process and sell higher-value goods.

Value addition is an operational discipline before it becomes an economic outcome, contingent on the systems, processes, and capacity to deliver consistently and cost-effectively. Execution support plays a crucial role in bridging the gap between a strategy on paper and a business that can deliver it, providing manufacturers with clearer cost visibility, stronger forecasting, and a more credible basis for growth.

However, becoming bankable extends beyond operational execution. Manufacturers require robust financial foundations, including working capital, accurate forecasting, cost visibility, disciplined capital allocation, and systems capable of supporting growth without jeopardizing cash flow and margins. Financial resilience, therefore, relies on a suite of disciplines, including audit and assurance, financial modeling, working-capital management, performance improvement, and restructuring, when necessary.

Bankability also hinges on credibility. Manufacturers seeking investment or loans must demonstrate that their financials are sound and their governance is robust, where quality financial reporting and independent assurance act as commercial tools rather than mere compliance obligations. The ability to raise finance often hinges more on the credibility of the accounts than the strength of the business case.

Lastly, competitiveness emerges as a decisive factor in scaling manufacturing. Regional trade, technology, and enhanced value chains are commonly viewed as separate ambitions. However, they are better perceived as practical levers pulling in the same direction, towards improved cost, quality, productivity, delivery, and resilience.

Regional trade currently accounts for only around 14% of Africa's total trade, indicating that the African Continental Free Trade Area represents headroom rather than a finalized achievement. The value of the African Continental Free Trade Area will be judged not by the signed protocols but by its ability to reduce delivery times, lower landed costs, and make cross-border trading genuinely attractive in Africa.

Realizing this value depends on operational readiness, encompassing clearer customs processes, consistent treatment of certificates of origin, robust interpretation of trade rules, and the capacity to function across multiple jurisdictions.