Industrial Development in Africa
Senior 3 · Geography
Industrial Development in Africa
Lesson 4 of 4
35 min
Let's begin
On 21 March 2018, African leaders meeting in Kigali signed the agreement for the African Continental Free Trade Area (AfCFTA). Its aim is to turn more than fifty separate national markets into one, so that a factory in Rwanda can sell to buyers from Cairo to Cape Town as easily as to buyers in Huye. Africa has the raw materials and a young workforce, yet it still makes only a small share of the world's manufactured goods. What holds industry back, and can it grow?
| Problem | Explanation and example |
|---|---|
| Shortage of capital | Factories, machines and research cost money that local savers and banks cannot easily supply |
| Unreliable and costly power | Power cuts stop machines, as in Zambia's 2024 drought and South Africa's load shedding |
| Poor transport, especially for landlocked countries | Goods from Rwanda travel more than 1,400 km by road to the ports of Mombasa or Dar es Salaam, adding cost |
| Small markets and low incomes | Many national markets are small and many people cannot afford manufactured goods |
| Competition from imports | Cheap imported goods, including second-hand clothes, undercut local factories |
| Shortage of skilled workers and technology | Too few engineers and technicians; machinery often imported |
| Dependence on raw material exports | Countries export unprocessed crops and minerals, so others gain the value added |
| Trade barriers between African countries | Tariffs, slow border crossings and different standards reduce trade |
| Political instability and red tape | Conflict, corruption and slow procedures discourage investors |
| Pollution and pressure on water | Uncontrolled factories pollute air and rivers |
Definition
Landlocked country: a country with no coastline, which must trade through its neighbours' ports, such as Rwanda. Special Economic Zone (SEZ): an area with ready land, power, water and simpler rules and incentives to attract investors. Free trade area: a group of countries that remove tariffs on trade between them. Infant industry: a new industry that may need temporary protection until it can compete.
Rwanda is small, landlocked and far from the sea, so its strategy focuses on lowering costs and building demand for local goods. The Ministry of Trade and Industry (MINICOM) has run the Made in Rwanda campaign since 2015 and developed a Made in Rwanda policy in 2017. Its five pillars are sector strategies, reducing the cost of production, improving quality, promoting links with local suppliers, and changing attitudes towards local products. The Kigali Special Economic Zone gives factories serviced land, power and water in one place. In 2025, industry contributed 22% of Rwanda's GDP (Figure 5).
Africa's industrial future has strong points: a young and growing population, rich raw materials, large renewable energy resources, and the AfCFTA, which entered into force in 2019 and began trading in 2021. If power, transport and skills improve, African factories could make far more of the goods that Africans now import.
Worked example
Worked example 1: the cost of being landlocked (illustrative figures). Moving a container by road costs about 2 US dollars per km. A firm in Kigali sends a container 1,500 km to the port, while a similar firm near the port sends one 50 km. How much more does the Kigali firm pay per container?
Worked example
Worked example 2: reading Figure 5. In 2025, Rwanda's GDP was Frw 23,387 billion (NISR). How much larger was the contribution of services than that of industry, in billions of francs?
Warning
Match each solution to a problem. "Build more factories" is not a solution to anything. Write, for example: "Power cuts stop production, so countries should mix hydro with solar and geothermal power and trade electricity with neighbours."
Tip
In "prospects" questions, give both opportunities (young workforce, raw materials, AfCFTA, renewable energy) and conditions (better power, transport, skills and stability) that must be met for the opportunities to work.
CGTN Africa, 2018: the Made in Rwanda initiative, filmed at a clothing factory in Kigali's Special Economic Zone. Note what the factory makes and the challenges it mentions.
Practice
Further reading
Sources and credits
This lesson adapts CC BY-SA material and is shared under CC BY-SA 4.0.
