Even Africa’s poorest countries are too expensive to be the world’s next manufacturing hub

Tuesday, October 17, 2017

Even though the global economy has evolved significantly in the last few decades away from the industrial revolution—which transformed many of the world’s advanced countries—there’s still much hope tied to the idea that manufacturing will play a key transformative role in developing countries in Africa today.

Yet, it may be foolish to place too big a bet on manufacturing in Africa, according to a new research paper from US think tank, Center for Global Development.

The researchers used World Bank data to look at 5,500 firms in 29 countries. They compared labor and capital costs, and productivity and efficiency of manufacturing in sub Saharan Africa with similar countries outside Africa, in particular Bangladesh. They did not have good news for most of the region.

Photo courtesy of Stuart Price / AMISOM Public Information.

Source: Quartz Africa (link opens in a new window)

Investing, Technology
business development, manufacturing