Economic development

How to promote African factories

A sub-Saharan industrial revolution need not be a pipe dream

FEW BUILDINGS symbolise the rise and fall of manufacturing in South Africa better than the old General Motors plant in Gqeberha (previously Port Elizabeth). During apartheid the factory was sheltered from international competition by sanctions and tariffs. Now its vast silvered assembly halls stand bare. It was closed in 2017, an emblem of South Africa’s car industry, which shed almost one in four jobs between 2009 and 2017. That is typical of a wider decline of manufacturing across the continent. In 1975-2014 manufacturing’s share of GDP in sub-Saharan Africa fell from 19% to 11%.

This collapse has plenty of causes. In countries such as Zambia, firms were nationalised and run into the ground by bureaucrats. In resource-rich places such as Nigeria exports of oil or other commodities led to an overvalued local currency, making it cheaper to import things than make them. As much of the continent opened up to imports in the 1990s, manufacturers struggled to hold their own against hyper-competitive Chinese firms with the scale to drive down costs.

In 2015 Dani Rodrik, an economist at Harvard, wrote of “premature deindustrialisation” in Africa. The continent seemed to be missing out on an important means of boosting…