Africa's advanced industrialisation in four phases

Thousands of well-established African industrial SMEs seek partnerships with international peers. Like flywheels they create momentum by drawing Foreign Direct Investments and by accelerating Africa’s advanced industrialisation. Success attracts more talent, energising local micro-SMEs.
Time for a drastic climate action: a gradual de- or colocation of energy-intensive industries to Africa

The paradigm-shift

The annual creation of ten million jobs in Africa's formal agri-food and manufacturing economy makes it possible to curb the asymmetry in prosperity between Africa and Europe, avoid extreme ideologies, conflicts and forced migration.

European Commission: “Africa and Europe are establishing a new basis for their partnership”
African Union: from “How Europe could help Africa” to “How we can help the planet together”

‘Addressing faulty trade arguments isolated and impoverished Africa because the continent’s transformation and industrialisation was not prioritised’

Prof Carlos Lopes, keynote Anniversary African Union, March 2021µ

Raychelle Omamo

Cabinet Secretary for Foreign Affairs, Kenya

‘We realise in Africa that we don’t make enough, that we are not industrialised. Therefore we need new partnerships that will fundamentally change Africa’s integration into the world market. Africa cannot be that continent that is simply there to produce raw materials for others. So we need partnerships that invest in people, that avail knowledge and technical transfer. Africa cannot be an island. Africa must reach out to friends. Africa must collaborate for its own future'.

Prioritizing Partnerships with Africa, CSIS Africa Program on January 28, 2022

https://www.csis.org/events/prioritizing-partnerships-africa

Impedements

In Europe

Entrepreneurs, the general public and even authorities are not aware of the existence of 10-15 Sub-Saharan countries with fairly stable institutions, an educated middle class, abundant cheap renewable energies, accessible industrial zones and the emergence of the African Continental Free Trade Area.

In Africa.

In Africa. SMEs and the important financial elite lack the practice of complex, modern industrial entrepreneurship. Too few of them are aware why and how to succeed in international partnerships.
Funding, lack of infrastructures, cost of transportation and complex administrations are only secondary challenges.

Is it indicated that, to protect jobs in its energy-intensive industries, Europe heavily subsidises the development of technologies for carbon capture and storage when Africa is endowed with 37 percent of the world's capacity to produce cheap green hydrogen for a zero-emission production of steel, cement, fertiliser, petrochemicals, aluminium, ceramics, and glass? The loss of some thousands jobs in Europe can create millions of jobs in Africa and buying power of an immense new middle class for EU-upscale products and services.

The Opportunity

The climate, cheap African green hydrogen, the saturation of the EU market (after the post-Covid restart), the African Continental Free Trade Area are incentives for EU SMEs to accept partnership proposals from African industrial SMEs "with potential".

Africa's modern industrialisation in four phases

Phase 1. The guided change of “mainstream” mentalities

Both in Africa and Europe. (Debate evenings in the City Halls?)

Theme of the debates in Europe: "Africa is not the one you think"

EU-citizens and entrepreneurs only know "the unstable Africa, in need for aid and advice" from the mainstream media

Theme of the debates in Africa: "Entrepreneur dare to share your dream with an international partner".

African SMEs fear continued dominance from more advanced parteners

Phase 2. Thousands of African "well-established" industrial SMEs (not micro-start-ups) take the initiative to solicit partnerships with EU-peers.

Facilitated by Google, African SMEs seek to get in touch with an international homologue. They get to know each other in the virtual world but as soon as they feel a mutual interest they invest in a plane ticket in order to physically visit their respective workshops and customers.
The commercial antenna. During the first two years of the partnership, the African partner acts as commercial agent for the EU-counterpart's equipment. He adds his local know-how to the partnership: the African market, commercial, administrative and cultural knowledge.

The EU-partner trains, in Europe, the African partner and his executives to ensure the proper sale, installation, maintenance and use of the exported products and services. The phase "commercial antenna" enables a first transfer of advanced industrial know-how, with limited extra funding, without any risk and regardless of the state of local governance.
Thanks to the partnership, the African Industrial SME acquires on the job "the trade" of international value-chain partnerships and entrepreneurship in a hyper-competitive globalised economy.

Phase 3. The development of new products and services, "made in Africa", anticipating the new needs of the African Continental Free Trade Area.

In the course of the phase of a “commercial antenna” the trust between the two partners takes a definitive form. After a while the two partners decide to invest together in new products and services, based on the needs of the AfCFTA, the largest global free trade market and on the most advanced technologies and industrial processes.
This project “made in Africa”, submitted to the financial world by two well-established partners, becomes a "bankable" project.

Their example inspires hundreds of other industrial SMEs to follow their example and leads to the creation of thousands of jobs in the agri-food, manufacturing and services industries across all African economic sectors.
A large, educated middle class establishes governance from within and creates a critical mass of purchasing power that also attracts foreign direct investors.

Phase 4. Foreign direct investment by international flagships

The AfCFTA and thousands of SME-partnerships Africa-Europe create a middle class with significant purchasing power and stable institutions. This attracts the interest of large foreign direct investors of the flagship type.
Each individual Flagship creates hundreds, even thousands of jobs directly and upstream/downstream in value chains and in associated services.
These flagships, attracted by direct access to a new large emerging market, do not necessarily seek the infamous "race to the bottom" of wages.

They bring with them the experience of the most advanced processes and technologies that make it possible to locally transform raw materials into products that are competitive in local and international markets.
They select the "best in class" complementary partners in their value chain.
In the value chain, partners acquire "the trade" of modern entrepreneurship open to international competition.
Quickly, thanks to the concepts and technologies taken over from the multinational neighbour, agile “canoe” companies (SMEs, micro-SMEs) emerge around these flagships.

Results of the four phases of Africa’s modern agri-food and manufacturing industrialisation

“Proven” SME-partnerships and FDI flagships initiate an ecosystem which yearly creates ten million jobs in the formal sector, a number of new quality jobs higher than Africa’s demographic growth.
They have access to the resources and financial means to invest at scale in agri-, food- and manufacturing industries and related - digital - services. Without them there is no way to reach a breakthrough in the creation of millions of quality jobs, also for woman and unskilled men.
They make use of environmentally friendly hydro-solar energy and act as a management school for local SMEs.

They stimulate Africa’s important elite to follow their example and invest in a productive economy by replacing their investments in “commerce” and “real estate”. Activities that generate few formal jobs.
They accelerate an ecosystem that stimulates serendipity (finding something useful that you are not looking for) and the emergence of new “innovative” sectors, not planned for, but creating millions of new quality jobs.
Together they silence Putin

Conclusion

Africa’s inclusive, sustainable, resilient industrialisation

The de-globalisation of manufacturing combined with the globalisation of industrial know-how, the local transformation of natural resources, the short value chain and eternally renewable African energies reconcile African social and economic progress, prevent climatic and pandemic apocalypses, avoid irruptions of supply chains, revive the EU-economy and … silence Putin.

The only prerequisite to be taken care off: a guided change of mentalities as well in Africa as in Europe

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Shouldn't Europe prepare for the fact that, despite mega-subsidies for CO2 capture and storage, energy-guzzling industries are moving to locations close to the source of affordable green hydrogen?