Transformation in Africa: Here, Mounia Boucetta, Affiliate Professor at University Mohammed VI Polytechnic, explores how global megatrends are reshaping industrial economies and creating new opportunities for Africa’s industrial emergence
Global transformations reshaping the industrial economy
Industrial economies are undergoing profound changes, driven by global megatrends that are reshaping societies at every level. These shifts bring both opportunities and challenges. In recent years, the persistence and intensity of geopolitical tensions have created an environment of increased volatility and uncertainty. This makes long-term planning increasingly more complex, prompting nations to rethink industrial sovereignty and reconfigure global value chains.
At the same time, demographic, energy, and digital transitions are redefining how we live, work, and consume. The rise of artificial intelligence and Industry 5.0 is accelerating productivity and innovation – but also widening the gap between countries that produce technology and those that primarily use it. This raises two critical questions: How do we ensure inclusive access to digital infrastructure? And how can we place human needs at the heart of innovation?
Compared to digital transformation, the energy transition presents greater financial hurdles. It demands significantly higher capital expenditures (CAPEX), often with relatively modest or delayed returns on investment. Nevertheless, there is no doubt that accelerating decarbonisation and ensuring compliance with environmental standards and regulations are non-negotiable. The central question, however, remains: who will bear the cost of this transition? The environmental regulatory frameworks which are currently being implemented in Europe will inevitably impact both product market access and consumer prices.
In less developed countries, the energy transition must not become an obstacle to economic development or to deeper integration into the global economy. While it offers promising industrial opportunities, particularly in green technologies and low-carbon energy sectors, mobilising the required financing remains a major challenge. Ensuring that these countries can participate meaningfully in the global energy transition will require targeted support mechanisms, adequate financing, and robust capacity-building initiatives.
The demographic transition is also a central driver of future transformations. The healthcare sector is gaining growing attention, driven by heightened awareness of pandemic risks, and by the aging populations that increasingly define developed economies.
In less developed countries, challenges such as food security, the impact of climate change on agricultural yields, and the urgent need to preserve ecological sustainability call for a deep transformation of food systems, including industrial transformation.
Industrial transformation in Africa: Opportunities and challenges
Africa’s industrial development and transformation is being shaped by these global shifts. While these changes create promising opportunities, seizing them remains a major challenge due to a combination of structural limitations and short-term constraints. Outside a few dynamic regions, industrial development across the continent remains limited. This is primarily due to infrastructure gaps, insufficient access to energy (with nearly half the population still lacking electricity), gaps in technical and vocational skills, and persistent political instability in certain areas.
Nonetheless, several African countries have made significant strides by adopting export-oriented strategies and attracting foreign investment, particularly in high-potential sectors such as automotive manufacturing and aerospace. Competitive production costs and strategic logistic assets, such as Morocco’s Tanger Med Port and Egypt’s Suez Canal, are helping position Africa as a viable industrial hub. The continent’s rich natural resources, including critical minerals and renewable energy, offer a clear competitive edge. Leveraging emerging global trends as a true catalyst for accelerating industrialisation should be a strategic priority. The industrial sector plays a vital role in job creation, value generation, and in closing gaps related to the Sustainable Development Goals (SDGs).
Africa’s abundance of natural resources – including critical minerals and vast solar, wind, and hydroelectric potential – positions the continent to play an increasingly important role in emerging industries, particularly green energy. This potential can serve both domestic needs and international export markets.
The main challenge lies in converting this potential into sustainable and transformative industrial ecosystems. Achieving this goal requires proactive industrial policies that foster integrated and coordinated initiatives across interdependent sectors such as energy, water, and agriculture. This approach must also include the development of human capital, promotion of technological innovation, strengthening of institutional capacities, and establishment of strategic partnerships at both regional and international levels.
Key levers driving Africa’s industrial emergence
Financing is a critical enabler – yet remains difficult to mobilise. Even when projects demonstrate clear economic and social relevance, the high exposure to risks such as elevated debt levels, weak governance, and institutional instability hinders capital mobilisation. This is further exacerbated by the limited size of domestic markets and the persistently low levels of intra-African and intercontinental trade, which account for only about 15% of global continental trade.
In this context, Africa’s strategic positioning must be anchored in deeper economic integration, both at the regional and continental levels. The African Continental Free Trade Area (AfCFTA) is a foundational lever for enhancing trade among African nations. However, its implementation remains in early stages. Its long-term impact will depend on several key factors: the quality of logistics infrastructure, the harmonisation of regulatory frameworks, and the emergence of a competitive export base – underpinned by a robust and sustained industrial policy.
From this perspective, the development of industrial clusters – centered around regional logistics hubs and supported by cross-border, interconnected and interoperable energy, digital, and transport infrastructure – could serve as powerful catalysts for the continent’s industrial rise.
One notable initiative is the Royal Atlantic Initiative, launched in 2023 by His Majesty King Mohammed VI of Morocco. It brings together 23 African countries along the Atlantic coast, aiming to provide Sahelian nations with strategic access to the Atlantic Ocean. This initiative has the potential to foster competitive logistics and energy hubs, create the critical mass needed for large-scale industrial projects, and leverage sectoral complementarities among countries to enhance the valorisation of natural resources.
A new industrial pact for Africa
Against this backdrop, there is an urgent need for a new industrial pact to support Africa’s emergence. This pact must be anchored in the promotion of high value-added, productive partnerships; alignment with emerging global megatrends; sustained investment in technological innovation; development of skills through targeted training programs; and the mobilisation of African expertise.
Africa’s industrial development pathways will not follow a linear trajectory or replicate existing models. Instead, they must be grounded in the continent’s unique realities and driven by local capabilities and innovation.
