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Africa: The Next Manufacturing Capital of the World. Really.
Sub-Saharan Africa is probably NOT going to be the next manufacturing capital of the world. However, it is going to do a lot better than everyone says it is going to do. Many of the products that will appear on your store shelf and will be in use in your home are going to come from Sub-Saharan Africa.
Why is this going to be the case?
Cheap Labor. Production moved from the United States to China because labor was cheaper in China. Production is moving from China to subcontractors in Southeast Asia because Southeastern Asian labor is cheaper than Chinese labor.
Africa is the largest repository in the world of cheap labor. At some point capitalists will realize that there is almost no place in the world that will be able to match the production costs of Sub-Saharan Africa. At that point, Africa will become the factory for the rest of the world.
Most people think that Africa will be poor forever. People who think about the question in greater depth might think Africa would be okay for mining diamonds and rare minerals. It might be okay for crop growing. But they can’t imagine Africa as a potential manufacturing power. Some of that thinking is tinged with racism. Africans are assumed to be uneducated and violent. The workers would not be able to handle complex production processes, The factory would get blown up in the next civil war. On further reflection, skeptics might argue that Africa lacks the transportation infrastructure to get goods to the wealthy markets of the West.
The data however tell a different story. Between 1981 and 2001, the prospects for African manufacturing remained gloomy. Overall production was steadily declining. The twenty-first century produced a massive invigoration of African growth. Manufacturing nearly tripled between 2011 and 2021 and growth continued into the present decade.
Some of this comes from simple population growth. More people represent more workers. However, more people also represent bigger markets. Population growth has led to the possibility of thriving robust sales for African manufacturers selling to local consumers. Not all manufacture is for export purposes – and not all manufacture has to fit some sort of “global competitive standard”. Manufacture in local foodstuffs will always be to local standards rather than Americanized standards. African families know what they want to eat. Housing supplies will generally be local. Concrete, building blocks, plywood and pipes are bulky products that cost money to transport. Such goods are generally made locally. The technology for making construction products is fairly simple, allowing even nations with rudimentary engineering capacities to get into the business and do well.
Some of the manufacturing growth comes from increases in education. Sub-Saharan Africa has the lowest indicators of educational attainment of any region in the world. However, levels of education are steadily rising. According to the World Bank, primary school enrollment as a percentage of the school-age population in Sub-Saharan Africa has nearly doubled between 1970 and 2020. Literacy rates have gone from a little under 50% in 1985 to 66% in 2020. Literacy in some countries is higher. In Angola, Botswana, Cabo Verde, Eritrea, Eswatini (the former Swaziland), Gabon, Ghana, the Ivory Coast, Kenya, Mauritius, Namibia, Sao Tome and Principe, the Seychelles, South Africa, Zambia and Zimbabwe all have literacy rates over 80%. In Sub-Saharan Africa as a whole, enrollment in tertiary education has gone from practically zero in 1970 to nearly ten percent of the college age population in 2020. Once again, college education rates are higher in certain countries. Botswana, Cabo Verde, Gabon, Mauritius, Namibia and South Africa all report college enrollment rates of at least 20% of youth of college age.
These exact numbers should not be taken too literally. Some of the statistics are probably manipulated. There are nations that report higher primary school enrollment than they have school-aged children. In war zones, primary school attendance is likely to be near zero. However, the general sense of the data is that education levels for Sub-Saharan Africa are improving. Some countries are doing better than others. The island nations tend to outperform the nations on the continent. Southern Africa does better than nations in Western, Central or Eastern Africa. Within countries, urban areas are far better served by schools than are rural areas. There are significant differences by ethnic group; education rates tend to favor the region of whatever ethnic group is in power.
But the bottom line is that despite Africa lagging behind the rest of the world in educational attainment levels, there are countries and regions where there is a labor force that is educated enough to participate in manufacturing. Literacy is all that is required for many forms of blue-collar work. Some manufacturing processes don’t even require literacy. 50% literacy rates would be more than enough to support any kind of low-end labor-intensive manufacturing operation. 80% literacy rates – rates which are available in many countries – would certainly be sufficient for this kind of export manufacture.
Furthermore, one only needs a relatively small number of engineers and managers to run the top end of a manufacturing operation. In Nigeria only 12% of college aged youth attend college. However, Nigeria is a nation of almost 30 million people. If only one percent of Nigerians were qualified to be engineers or managers, this would still represent 300,000 people. You can run a lot of companies with 300,000 engineers and managers to work with.
A different reason for the growth in African manufacturing has been the reduction in violent conflict in Africa. The Peace Research Institute in Oslo reports that African battle deaths reached a peak in the 1980s and the 1990s. After 2001, this number dropped precipitously. The 1980s and 1990s saw the First and Second Congo Wars, the genocide in Rwanda, the Mozambique Civil War, the Lord’s Resistance Army rebellion, the Liberian Civil War and the Eritrean War for Independence. The twenty-first century has had its violent conflicts. The Eastern Congo has been perpetually unstable. There have been civil wars in Somalia, South Sudan and the Ivory Coast. But the overall volume of warfare has been lower.
Note that the globalization of production and modern flexible productions methods lower the effect of warfare on regional manufacture. Manufacturing facilities are now mobile – especially in light manufacture. A clothing sweatshop may involve no more fixed capital than a warehouse, a set of chairs, tables and sewing machines. A fancier operation may have robotically controlled machines. Either way – under conditions of political instability, factories can be closed quite quickly and production moved to other countries. Production in Liberia can be moved to Senegal and vice versa. While civil war can decimate production in a particular nation, it need not adversely affect production in Sub-Saharan Africa as a whole. Multi-sourced production was pioneered by auto companies in Western Europe where the threat consisted of strikes rather than civil wars. American auto companies typically created duplicate facilities in two nations so that a general strike in one country would not force any loss of production in the other country. In the twenty-first century, with improved computer production, better transportation, increased miniaturization, it is now even easier to implement dual sourced production systems. Mobile capital has always been able to avoid excessive taxation and government regulation. It can now avoid internal disorder as well.
How will manufacturing in Africa play out? Manufacturing in Africa can take two forms, both of which will probably exist. One will involve local entrepreneurship and local labor. This could be upscale high-value-added or downscale on a simple sweatshop model. The other will involve foreign entrepreneurship. These foreign projects are likely to be all about cheap labor – the exploitation of the world’s most inexpensive workers.
Robert Wyrod has done a wonderful ethnography of Chinese development projects in Uganda that captures what the future of manufacture may look like. His “In the General’s Valley: China, Africa and the Limits of Developmental Pragmatism” in the Sociology of Development studies a number of industrial projects in “The General’s Valley”, otherwise known as Kapeeka, a village in Uganda forty miles from Kampala, the capital. This is a region where “The General”, a brother of Uganda’s president, has been confiscating land titles to create a private 4000 acre industrial park and security zone for himself. The General brought in Chinese to do the actual economic development. The primary Chinese entrepreneur has extensive ties to the Chinese military and to well-placed officials in the Chinese government. A broad variety of projects were attempted – both agricultural and industrial. Many did not succeed. But after a lot of trial and error, a roof tile business was started that turned out to be successful. Once the roof tile business succeeded, a number of other industrial enterprises were started in the area.
Wyrod’s argument is that the success of Kapeeka is based almost entirely on repressive labor control. With the industrial park came armed security guards who are now present everywhere in the town. They guard not only the General’s personal residence but the economic enterprises in the valley and control traffic flow throughout the area. Land for the project had been acquired forcibly – and tensions continue to exist between the locals and the Chinese. Tensions became even greater when the Chinese stopped employing local workers but ported in workers from a different ethnic group elsewhere in Uganda over whom they could exert an even greater level of physical control. Labor standard violations and physical intimidation of workers were common. Workers typically work 70-75 hours a week. Wage penalties and wage withholdings are common. The Chinese supervisors are frank in their racial contempt of the workforce; insults and conspicuous gestures of disrespect are common. Corporal punishment is common. Wyrod heard repeated stories of physical abuse of workers either by the Chinese owner himself or by middle managers. Mistakes that produce scrap are typically punished by beatings. Attempts to collect back pay are punished by severe beatings. Wyrod does not provide any data on pay rates. I would be willing to guess that wage rates are low.
Note that this kind of abusive treatment would be less common in China itself. There was a time when the Chinese labor force was weak. However successful economic development has led to some absorption of the reserve army of labor. Unionized Chinese labor now exists – and there are some limits on the ability to impose long hours and low wages on Chinese workers. (Not all Chinese workers are strong or unionized and not all Chinese wage rates are high.) Sub-Saharan Africa is simply a more promising ground for the super-exploitation of labor.
Note that the super-exploitation of labor in one period can lead to a prosperous better paid labor force in a later period. South Korea was well known for low wages and long hours in the early years of development, the 1960’s and 1970’s. South Korean wages are among the highest in Asia today. South Korea was known for low end sweatshop production in the 1960’s. It is a high-value-added technologically sophisticated manufacturer today.
Sub-Saharan Africa could easily have this trajectory. Value-added in manufacturing is steadily on the rise. A reduction in the civil wars that plague Africa would be helpful. But even under the status quo, the economic advantages of low-cost manufacturing in Africa are going to become increasingly apparent.
Will Africa rise to the standards of living of Scandinavia by the middle of this century? Probably not. Could parts of Africa attain the levels of development experienced by Latin America or Southeast Asia today? Such a scenario is entirely possible.
Currently, Wakaliwood in Uganda is becoming a center for the creation of successful action movies. If you have never seen a Wakaliwood martial arts adventure movie, you are in for a treat. No one would have envisioned Uganda as a viable film maker twenty years ago. What applies for moviemaking applies to many other forms of industrial creation too. Made in Kenya or Made in Ethiopia or Made in Rwanda may become a part of your life.
For More Information
The World Bank data on primary school enrollment in Sub-Saharan Africa can be found at https://data.worldbank.org/indicator/SE.PRM.ENRR?locations=ZG.
The World Bank data on tertiary school enrollment can be found at https://data.worldbank.org/indicator/SE.TER.ENRR?end=2019&locations=ZG&start=1970&view=chart
Literacy rates are from Macrotrends adaption of World Bank data https://www.macrotrends.net/countries/SSF/sub-saharan-africa-/literacy-rate
The statistics on battle deaths in Africa come from Palik, Julia, Siri Aas Rustad and Frederik Methi. 2020. Conflict Trends in Africa 1989-2019. Olso, Peace Research Institute of Oslo.