While there is some momentum in industrialisation efforts across Africa, a panel of industry participants have cautioned against a knee-jerk reaction that could fragment or overwhelm capacities on the continent.

Industrialisation on the continent has historically lagged that of the rest of the world, owing to, besides others, a lack of infrastructure and enabling policy frameworks, as well as fragmented efforts to embed manufacturing locally or regionally and a heavy reliance on commodities.

Panellists participating in a discussion at the Deloitte Africa in 2018 Outlook Conference, held in Johannesburg recently, argued that each country needs a customised “recipe with all the right ingredients” and a more targeted approach to ensure a sustainable base that is specific to each country without trying to tackle every possible industry.

International Finance Corporation equity investments principal investment officer for manufacturing, agribusiness and services Ken Osei told delegates that national-level changes in policies related to industrialisation were on the rise, with many African countries working to reposition themselves as “industrial entities”.

However, without a vision at national level, or a targeted focus, a country cannot be industrialised or, in some cases, reindustrialised.

He commented that no country could industrialise in every area and that each country should “start with a few areas” and build around that, while creating an enabling environment and building a comprehensive supporting framework.

The continent had been “forced into a corner” as commodity prices dropped, with the economic crisis spurring governments to action, explained Renaissance Capital sub-Saharan Africa economist and head of research Yvonne Mhango.

While much had been done to start countries on the industrialisation path, driving industrialisation policies was a challenge, with government needing to ‘come to the party’ with the right policies and the development of supporting infrastructure.

Her comments were in response to Nissan sub-Saharan Africa sales and operations director Jim Dando’s views that there was a lot of “incorrect motivation” for trying to develop industrial capacity, particularly in the automotive industry.

In times of crisis, capital outflows forced countries to look inward, he said, and incentivisation needed to be wisely managed. He indicated that the knee-jerk reaction, in many cases, offered incentives to the automotive sector for the costly establishment and operation of an unnecessary local reassembly line.

He pointed out that, instead of importing vehicles to be reassembled locally, which could often drive up costs, there was a more urgent need to create local suppliers that would support the industry.

“On the policy side, we have seen some move in the right direction in terms of industrialisation, but much more needs to be done,” Mhango added.

thyssenkrupp sub-Saharan Africa CEO Thabo Molekoa commented that it was critical to start with a solid position on an industrial policy, map out a required direction and what was needed to be done, determine the role government would play and what would attract the most international investment.

Manufacturing Circle executive director Philippa Rodseth reiterated the importance of government assistance in the form of incentives, trade negotiations and tariffs, but pointed out that this should be done on a case-by-case basis.

There was a need to understand the complexities involved in achieving sustainable growth, as well as levelling the playing field for manufacturers and establishing regional industries.