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Made in Africa : Sustainable and inclusive growth

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Made in Africa : Sustainable and inclusive growth

Foreign, Commonwealth and Development Office (FCDO) and McKinsey Collaborate to Promote « Made in Africa » as a Development Pillar.

Overview of the Manufacturing Africa Initiative

In 2019, the FCDO partnered with McKinsey to lead a consortium to implement Manufacturing Africa. The British government is the primary funder of this economic program. McKinsey mainly focuses on supporting transactions and developing strategic transformation studies for manufacturing sectors. The firm provides in-depth financial analysis, modeling, marketing, business planning, and technical assistance.

The consortium is committed to building sustainable businesses in Africa, aiming for inclusive economic transformation by supporting investment promotion agencies in equitable fund mobilization. To achieve the consortium collaborates with various stakeholders, including investors, manufacturers, and governments. Additionally, Manufacturing Africa is developed with the audit firm BDO, Steward Redqueen Reformatics, and TechnoServe.

The Manufacturing Africa initiative aims to mobilize 1.2 billion GBP of Foreign Direct Investment (FDI). The fund is intended to generate 90 000 jobs in the manufacturing sector on the continent by 2026. However, recent data indicates that the funds raised amount to 690 million GBP.

Catalyst for Strategic Investments

Unlike conventional funding platforms, Manufacturing Africa drives inclusive growth by attracting FDI to innovative projects. The initiative has successfully catalyzed 28 manufacturing deals, drawing over 850 million USD in FDI and creating 16,000 jobs. The program has already contributed to transforming economies in Ethiopia, Kenya, Nigeria, Senegal, and Rwanda.

Overall, Manufacturing Africa supports nearly 135 transactions, some still in progress. This represents an investment pipeline of 2 billion USD, aimed at generating at least 30 000 jobs in the green economy, packaging, agro-processing, textiles, and appliances.

Unleashing the Potential of « Made in Africa » Label

By 2050, Africa’s population is expected to double, with 40 % of its inhabitants under 15 years old, and the number of urban dwellers is projected to triple. Demographic growth significantly increases needs, burdens, and public spending. The local labor market will experience increased demand. The imbalance can lead to a crisis with potential negative economic repercussions. In this context, the manufacturing sector emerges as a crucial response.

Manufacturing forms the foundation of a growing, inclusive, and emerging economy. The manufacturing sector in Africa thus becomes a growth factor, benefiting millions across the continent. However, strategic and resilient development of this sector is essential to help the continent fully realize its potential within the global economy.

African Design : A Suitcase of Innovation

In recent years, the continent has seen the emergence of numerous talents, drawing considerable international attention to their creativity with a particular focus on sustainability. In addition to traditional crafts, a staple souvenir from a trip to Africa, « Made in Africa » now encompasses technological and ecological innovations. These innovations span various fields, from agri-food to electric vehicles and medicine.

SAMANU : A Sustainable Project

Despite being an exporter of oilseeds, Ethiopia annually spends nearly 600 million USD on importing edible oil. Seizing this opportunity, Manufacturing Africa, in partnership with 54 Capital, invests 21 million USD in growth capital in SAMANU in Addis Ababa.

The funding will be used to build a new factory to produce edible oil from local seeds such as soybeans and sunflowers. With a daily crushing capacity of 200 tons, the facility will increase SAMANU’s production by 130 %. The initiative is expected to create over 200 jobs and generate revenue by exporting animal feed.

Local farmers also benefit from this, with the creation of a regional supply strategy involving 7,000 family farms. Collaborating with organizations like the Agricultural Transformation Institute, SAMANU aims to harvest 55,000 tons of oilseeds in 2023. The eventual result involves between 5,000 and 7,000 farmers at total capacity.

Inclusivity : Local Vaccines

Less than 1 % of vaccines used on the continent are produced locally. With Africa’s strong dependence on vaccine imports, Manufacturing Africa is working to reverse this trend by catalyzing local vaccine production.

In 2021, the initiative supported the first African Summit on vaccine manufacturing, facilitating over 30 discussions to secure concrete commitments. Initiatives like the African Vaccine Manufacturing Partnership (AVMP) of the African Union are steps toward larger-scale action.

These efforts led to strategic partnerships between the Africa CDC, the Coalition for Epidemic Preparedness Innovations Afr, Eximbank, and the Africa Finance Corporation. Manufacturing Africa is currently engaging with over 15 new manufacturers and investors. This includes creating a map of economic opportunities and cost comparisons between different vaccines.

Resilience : Investment in Roam

According to forecasts, 80 % of global vehicle sales will be electric by 2050. Roam, a company active in Kenya, has secured 11.8 million USD in investments through Manufacturing Africa to meet the growing demand. Specializing in converting petrol vehicles into electric ones, Roam has experienced rapid growth, working with over 60 commercial clients.

Its collaboration with Manufacturing Africa allows significant expansion to increase its local manufacturing capacity. The initiative provides an overview of the value chain, identifying key countries’ collaboration opportunities and market dynamics. The advancement also contributes to Kenya’s government policy on the circular economy.

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