Africa’s Industrial Future is Within Reach: What we Need now is Intentional Investment
With collective commitment, Africa can shift from potential to powerhouse—and reshape global industrial landscapes. Two former students of the Zambian Industrial Training Academy, established with the support of UNIDO and other partners, work at an engineering company. Credit: UNIDO
When the world marked Africa Industrialization Day in November, UNIDO Director General, Gerd Müller reflected on the continent’s progress and the urgent investments needed to drive sustainable, competitive industrial growth. In this op-ed, he outlines why Africa stands at a defining moment—and what must happen next to unlock its full industrial potential.
By Gerd Müller
VIENNA, Austria, Dec 8 2025 (IPS)
Africa enters 2025 at a pivotal moment in its development. The ambition to transform the continent’s economies through sustainable industrialization, regional integration, and innovation is clearer than ever, and is picking up pace. The foundations are being laid. Industrial strategies are expanding, regional integration is progressing, infrastructure projects are advancing, and a young, dynamic private sector powers local economies.
Africa’s GDP growth remains among the highest globally, with more than 20 countries expected to have exceeded 5% growth in 2025. Manufacturing value added has increased in several sub-regions, and new investments in green energy, digital connectivity, and agro-industrial value chains are taking root.
Gerd Müller
What is slowing us is that this progress is fragmented and uneven. Manufacturing accounts for just over 10% of GDP across the continent. More than 60% of industrial output comes from low-value sectors. Trade costs remain roughly 50% higher than global averages and reliable electricity access still reaches only 48% of Africa’s population.
Although Africa is responsible for less than 4% of global greenhouse gas emissions, it is among the hardest hit by the impacts of climate change. Meanwhile, commitments to climate finance and fairer credit conditions have not been fully met.
Borrowing costs remain high for African economies, which limits their capacity to invest in the infrastructure, energy systems, and industrial ecosystems needed to compete fairly in global markets.
The truth is that Africa has all the ingredients for industrial transformation. The continent holds abundant mineral reserves, including more than 30% of global cobalt, yet captures less than 1% of global battery production.
Africa added 2.4 gigawatts of new solar capacity in 2024 and renewable energy now accounts for nearly 15% of total installed capacity. The digital economy is expanding rapidly, with internet penetration reaching 44% and with 12% of manufacturing firms adopting digital tools.
Africa’s population, with a median age under 20 years in many countries, is one of the strongest assets for future industrial development. Fertile land, expanding urban centers, and growing innovation ecosystems point to a future in which Africa could become one of the world’s most competitive industrial regions.
What remains missing is not ambition or potential but investment on time and at scale to unlock this transformation. Infrastructure gaps continue to impede value chain development. Industrial parks, logistics systems, ports, and energy corridors need sustained and coordinated financing.
Regional integration through the African Continental Free Trade Area offers a historic opportunity to expand intra-African trade and strengthen continental value chains, yet this requires harmonized standards, lower logistics costs, and the full operationalization of continental instruments.
Development assistance can help build regulatory capacity and institutional capabilities, but it cannot substitute for the long-term investment needed to build industries that create jobs and drive structural transformation.
This is where the upcoming Fourth Industrial Development Decade for Africa (IDDA IV, 2026-2035) provides a renewed strategic framework to accelerate and transform the continent’s industrialization efforts, in line with Agenda 2063 and the 2030 Agenda.
Championed by the African Union Commission, the UN Economic Commission for Africa, UNIDO and other partners, IDDA IV aims to leverage innovation, investment and integration to transform Africa into a global production base, one that is competitive, green, and digitally enabled.
At a national level, UNIDO’s Programmes for Country Partnership (PCPs) offer a compelling vehicle for industrial rise. PCPs support governments and the private sector in identifying priority value chains, mobilizing domestic and international investors, strengthening policy and institutional frameworks, and developing the skills needed to build strong and sustainable institutions.
They bring together government, development partners, the private sector, and financial institutions around a shared industrial vision. They help create the enabling conditions that lower investment risks and accelerate the expansion of competitive industries.
Under the strength of this approach, governments and partners mobilized both public and private investment, to develop agro-industrial parks and agro-poles. PCPs have also helped deepen support for agro-processing clusters, creating jobs for youth and women, and have raised the competitiveness of the private sector.
The PCP approach shows that when industrial priorities, investment promotion, skills development, and infrastructure are advanced together, the results can be transformative and durable.
Africa’s industrial future is within reach. The frameworks are in place. The continental vision is clear. What is needed now is intentional investment that matches Africa’s potential. Fairer credit conditions, stronger climate finance delivery, and deeper regional cooperation will be essential to move from plans to large-scale implementation.
The private sector, responsible for the vast majority of jobs and investment, will continue to be a critical driver of job creation and innovation if it is supported with the right infrastructure, policies, and market opportunities.
Africa will not be transformed by speeches. It will be transformed by coherent action and long-term investment. The continent has the resources, talent, and vision required to stand among the world’s leading industrial regions. What is needed now is a collective commitment to scale what works and support Africa’s ambition to industrialize sustainably and competitively.
Source: Africa Renewal, United Nations
IPS UN Bureau