Can the African Development Bank’s Industrialization Strategy Truly Transform Africa?

With an increasing youth population, vast natural resources, and increasing digital connectivity, the continent has all the ingredients for an industrial revolution. Yet, manufacturing still contributes just 10% of Africa’s GDP, far below the global average. The African Development Bank’s (AfDB) Industrialization Strategy for Africa (2016–2025) was designed to change that, but with the deadline looming, will it deliver?

Launched nearly a decade ago, the AfDB’s strategy hinges on six flagship programs aimed at fast-tracking industrialization. These include supporting industrial policies, developing special economic zones, improving infrastructure, supporting small businesses, boosting regional trade, and enhancing skills development.

The Bank pledged to ramp up funding, betting that strategic investments in these areas would propel Africa into a new era of economic prosperity. But as 2025 approaches, the question remains: Is the continent any closer to industrializing, or are the same old challenges still holding it back?

One of the strategy’s key pillars is helping African governments craft and implement effective industrial policies. Countries like Ghana, Ethiopia, Morocco, and Rwanda have made notable strides, leveraging special economic zones (SEZs) to attract manufacturing investments.

Ethiopia’s Hawassa Industrial Park, for instance, has created 60,000 jobs and boosted textile exports. Ghana’s 24-hour Economy Policy is expected to reduce the country’s reliance on exporting raw materials, create value-added production, large-scale job creation, and a more resilient, export-driven economy.

Yet, elsewhere, progress is sluggish. Many African nations still struggle with policy inconsistency, red tape, and weak enforcement. A 2023 World Bank report found that only 20% of African firms believe their governments provide adequate support for industrialization. Without stronger governance, even the best policies risk remaining on paper.

No industrialization drive can succeed without reliable infrastructure. The AfDB has poured billions into energy, transport, and digital projects like the Desert to Power initiative, which targets to generate 10 GW of solar energy across the Sahel.

Still, Africa’s infrastructure deficit remains staggering. The continent needs $68–$108 billion annually to close its infrastructure gap, according to AfDB estimates. Power outages, poor road networks, and inefficient ports continue to stifle industrial growth. Until these bottlenecks are fixed, Africa’s factories will struggle to compete globally.

Small businesses are the backbone of Africa’s economy, yet they face immense hurdles. The AfDB’s Boost Africa Initiative has helped some startups access funding, but 80% of African MSMEs still lack adequate financing, per the International Finance Corporation (IFC).

Similarly, while skills development programs exist, Africa’s youth unemployment rate sits at 22.5%, according to the International Labour Organization (ILO). Many graduates lack industry-relevant skills, leaving factories struggling to find skilled workers even as millions of young people search for jobs.

The African Continental Free Trade Area (AfCFTA) could be the missing piece in Africa’s industrialization puzzle. By removing trade barriers, it promises to boost intra-African trade by 52% by 2025, according to the UN Economic Commission for Africa.

But progress has been slow. Non-tariff barriers, poor logistics, and resistance from some industries have delayed full implementation. If AfCFTA succeeds, it could create a massive market for African-made goods. If it fails, the continent may remain fragmented and dependent on imports.

The AfDB’s industrialization blueprint is well-crafted but incomplete. Some countries are making headway, but systemic challenges, corruption, weak institutions, and financing gaps persist.

For the strategy to truly succeed, three things must happen:

Governments must prioritize policy consistency and ease of doing business.

Private sector investment must complement AfDB funding.

AfCFTA must move from agreement to action.