Path to industrialization – evaluating key political parties’ promises on AU Industrialization Day 2024

Industrialization has long been recognized as fundamental for economic growth and development. For Africa, the journey toward sustainable industrialization remains crucial to unlocking economic potential, fostering job creation, and achieving long-term global competitiveness.

As we mark African Union Industrialization Day, November 20, evaluating where the continent stands, the future of sustainable industrialization, and how strategic frameworks such as Ambidexterity for Africa (A4A) align with these goals is essential.

Current state of industrialization in Africa

In 2024, Sub-Saharan Africa is projected to be the second-fastest-growing region globally, following Asia, with an expected GDP growth rate of 3.8percent, surpassing the global average of 3.2.percent. West Africa, led by Nigeria and Ghana, is set for a strong 4.5percent growth in 2024. East Africa will grow at 3.9percent, while Southern Africa’s growth is forecast at 3.2percent.

South Africa is now the biggest economy in Africa, with a GDP of US$373 billion in 2024. Its diverse economy, led by the industrial sector, has been key to its success. The country excels in manufacturing, mining, agriculture, and tourism, driving its growth. Africa’s growth rate will be 3.5percent, increasing to 4percent in 2025. (WorldStatistics)

This economic resilience reflects a post-pandemic recovery influenced by resource-driven growth and policy shifts aimed at economic diversification. However, vulnerabilities remain due to uneven policy implementation, rising borrowing costs, and high inflation disruptions. These factors impede Africa’s capacity to compete robustly on the global stage, underscoring the need for enhanced, cohesive strategies. (IMF)

Africa has increased its medium- and high-technology exports—from 26.6percent and 4.0percent in 2012 to 31.9percent and 4.3percent in 2019. The opposite trend is observable in resource-based manufacturing and low-technology products, with their share dropping from 55.6percent and 14.7percent in 2012 to 49.6percent and

14.3percent in 2019, respectively. This positive development in the technological upgrading of Africa’s export mix unfortunately looks better than it is —the continent’s share in global manufacturing exports remains low at approximately 1.3percent.

This statistic highlights the need for stronger integration into global value chains and more robust industrial policies to bridge the gap between potential and performance. (UNIDO report published in 2020 entitled “African Industrial Competitiveness Report: An Overview of the Manufacturing Industry in the Region” – Observatoire Europe-Afrique 2030” in April 2022.)

Ghana’s key political parties’ manifestos with a focus on their industrialization policies

Ghana’s approach to industrialization, as outlined in the political manifestos of its leading parties for their 2024 election campaign messages, illustrates ambition and strategic intent.

NDC’s industrialization policies

The National Democratic Congress (NDC) emphasizes a comprehensive approach to industrialization through its Rapid Industrialization for Jobs Program. This initiative aims to:

• Revitalize dormant industries: The vision focuses on identifying and reinvigorating non-functional factories and industries to boost production capacity and job creation.
• Establish new industries: New industrial hubs are planned to foster economic diversification and reduce dependency on imports, aligning with the objective of value addition to local resources.
• The controversial 24-hour economy: Aimed at maximizing productivity and a system where businesses and activities operate around the clock.

Relevance and feasibility

The NDC’s approach is relevant as it seeks to address Ghana’s reliance on imported goods and enhance local production capabilities. Reviving dormant industries could potentially catalyze economic growth, create jobs, and foster skills development. However, the feasibility hinges on substantial investment, infrastructure development, and efficient public-private partnerships.

The NDC’s manifesto does not delve deeply into how these challenges will be addressed or outline specific timelines and funding sources, raising concerns about long-term sustainability.

Global context

Countries like India and Vietnam have successfully implemented policies to revive industries by creating industrial parks and incentivizing local manufacturing. These models show that the success of such programs depends on clear regulatory frameworks, skilled labor availability, and incentives for both local and foreign investors. NDC’s policies, while ambitious, may face obstacles if these foundational elements are not solidly in place.

NPP’s industrialization policies

The New Patriotic Party (NPP) continues its focus on agricultural and industrial integration through programs like:

• Planting for Food and Jobs (PFJ): Aims to boost agricultural productivity and create a reliable source of raw materials for industries.
• One Village, One Dam: Seeks to improve irrigation and ensure year-round farming, supporting consistent raw material supply.
• Climate Finance and Technology Integration: The manifesto highlights leveraging climate finance to bolster agricultural investments and integrating digital technologies to modernize the industrial sector.

Relevance and feasibility

The NPP’s industrial policies align with sustainable development goals by addressing the foundational issues of raw material supply and modern agricultural practices. This focus can potentially strengthen backward linkages between agriculture and industry.

However, the effectiveness of these programs is contingent on robust execution and scaling mechanisms. While the NPP highlights technology integration and climate finance, the practicalities of access to advanced technologies and funding channels remain uncertain.

Comparison to successful policies

Countries like Malaysia and Brazil have leveraged agricultural productivity as a basis for industrial growth, integrating agro-processing industries and promoting exports. These nations benefitted from consistent government investment in infrastructure, research, and development. For Ghana, while the NPP’s policies reflect strategic alignment with these examples, challenges in infrastructure, logistics, and skilled labor availability could limit efficacy.

Industrial policies in the global industrialization context

Both manifestos present policies that have potential but may not position Ghana at the forefront of global industrialization trends. Advanced economies are increasingly adopting Industry 4.0 technologies, characterized by automation, data exchange, and smart manufacturing.

• Ghana’s position: Ghana’s policies, while forward-thinking, still focus heavily on traditional industrialization models. The emphasis on agricultural linkages and revitalization of basic industries is crucial but must be complemented with aggressive moves towards digital transformation, smart manufacturing, and research and development to meet the benchmarks set by countries leading in Industry 4.0, such as Germany and South Korea.
• Future outlook: The extent to which Ghana’s industrial policies can push the nation into the future depends on bridging the current technological and infrastructural gaps. Without significant investments in these areas, Ghana risks lagging behind global industrialization standards. Policies that focus on integrating sustainable practices and technological advancements will be key to ensuring that Ghana does not just follow but competes on a global scale.

Achievability and strategic recommendations

Both the NDC and NPP manifestos outline commendable policies aimed at stimulating industrial growth, yet their efficacy and achievability remain tied to strategic implementation. The NDC’s revitalization of dormant industries and the NPP’s agricultural-industrial integration are both positive, but for Ghana to advance and align with global industrialization trends, policies must incorporate:

• Investments in industry 4.0: Adoption of advanced technologies and training programs.
• Strong regulatory and financial frameworks: To attract and sustain private-sector investment.
• Sustainability and innovation: Aligning with global trends in green technology and circular economy practices.

In summary, while Ghana’s key political party’s manifestos show intent and direction, aligning them with comprehensive and forward-looking strategies will be essential for positioning the nation as a competitive industrial player on the world stage.

Industrialization challenges and global competitiveness

Despite targeted efforts by African governments, sustainable industrialization has been uneven across the continent. High-tech industries, which are pivotal for global competitiveness, remain underdeveloped in many regions. Africa’s participation in advanced manufacturing and high-value sectors is minimal, necessitating a shift in policy focus toward investment in research and development (R&D) and skill-building.

The adoption of Industry 4.0 technologies—digitalization, smart manufacturing, and automated systems—varies widely across Africa. While nations such as South Africa and Morocco have made strides in this area, others lag significantly due to a lack of infrastructure, technological know-how, and investment. Bridging this gap requires collaborative efforts between governments, private sectors, and international partners to foster technological uptake and create an environment conducive to innovation.

A central aspect of global competitiveness is sustainability. Though progress has been made in adopting eco-friendly industrial practices, many African countries still face barriers to implementing these at scale. Investments in research, development, and skill-building are necessary to foster high-tech industries that can compete internationally. Without these advancements, Africa risks falling behind in the global race for industrial excellence.

The Role of A4A and framework integration

The Ambidexterity for Africa (A4A) Policy Framework offers a strategic approach that aligns with the AU’s vision of sustainable industrialization. It emphasizes ambidexterity, which is the balance between exploration (innovation) and exploitation (operational efficiency). By integrating these dual strategies, A4A aims to:

• Enhance business capabilities: Equip African businesses with the tools needed to adapt to shifting market conditions and integrate into global supply chains.
• Promote sustainable growth: Support eco-friendly policies that align with global standards and AU’s Agenda 2063, which calls for a prosperous and inclusive Africa driven by industrialization.
• Encourage academia, policy, and private sector synergy: Advocate for collaboration between academia, governments, and the private sector to create an enabling environment for innovation and economic resilience.

Alignment with the African Union’s goals

The African Union’s Agenda 2063 and its observance of African Industrialization Day highlight the necessity of sustainable and inclusive industrial policies. The AU calls for proactive measures that enhance manufacturing capacities, integrate green technologies, and support private-sector collaboration.

The A4A framework’s ambidextrous approach complements these goals by providing a roadmap for businesses to achieve long-term growth while adapting to shifting global market demands.

Conclusion

As we observe African Union Industrialization Day, the focus must remain on actionable strategies that translate political promises into tangible outcomes. Ghana’s political manifestos reflect ambitious policies that, if successfully implemented, could contribute significantly to the nation’s industrial and economic landscape.

However, achieving these outcomes requires strategic alignment, consistent policy implementation, partnerships, and research that bridge the public and private sectors.

The A4A Policy Framework is positioned as a complementary tool that bridges the gap between policy and practice, offering a path toward enhanced competitiveness and sustainable growth. For Africa to achieve its full industrial potential, stakeholders must champion strategic investments, sustainable practices, and partnerships that advance innovation and economic progress.

>>>Access the free copy of the Ambidexterity for Africa Policy Framework at a4a-gh.org to join the review and adoption. For Research partnership and sponsorship, contact the team at info@a4a-gh.org or artnerships@a4a-gh.org