Soaring Factory Prices – An Opportunity for Africa?

10 Jun 2021

Soaring Factory Prices in China – An Opportunity for Africa?

Labour and commodity costs in Africa are significantly lower than anywhere else. What is lacking is know-how and funding. Inflation at manufacturing hubs could present an opportunity for African leaders. Will they embrace it?

The economist published an article on June 9th titled “Soaring factory prices in China add to global inflation fears“. About a year ago, during the global lockdown and before China opened for trade, global manufacturers were scrambling for parts from China. Back then, many with interests in Africa said it is an opportunity for Africa to become the next manufacturing base.


It is an opportunity for Africa to become an alternate supplier for the global manufacturing industry that currently depends heavily on factories in China. This strategy is not a threat to Chinese dominance but an opportunity to diversify and invest in other growing markets. After all, China possesses much of the know-how and experience. Why not export that?

Africa has the fastest-growing population. By 2050 the continent will have 2.4 billion people—a billion more than today. With the youngest population globally, which will significantly increase over the next decade, Africa is already on its way to becoming the next big consumer market, and by 2050 the largest consumer market.  

As a continent, Africa is rich in natural resources. However, most of the resources extracted are exported to China and elsewhere for processing and later imported as a finished product. From an efficiency point of view, considering all this, the future consumer market and source of resources, would it not make more sense to mine, process and manufacture the goods close to the final consumer market?

Moving manufacturing capacity close to the source and consumer market would undoubtedly improve the turnaround time. It will also create investment opportunities, employment on the African continent and save all the energy associated with shipping materials to worlds away only to ship it back much later.

For more information on industrial projects or how to fund your manufacturing project in Africa, please contact us here.


Still have questions?

Our team is ready to help.

Get access to trusted and valuable data to inform your business decisions and open opportunities for growth.