The Next Big Five in Africa

Published on 9th February 2023

Who are the next Big five in Africa? Is it Kenya, the third largest economy in Sub-Saharan Africa with a macroeconomic trajectory that continues to develop massive infrastructure and ICT investments? Or is it Rwanda, a country whose genocide legacy has not stopped it from unleashing the potential of its people to become today an important investment destination in Africa? 

Or is it Ghana, Africa’s shining democratic star, where education is free up to senior high school, and where first-class infrastructure in air and seaports, rail and road, is fast making it one of the best destinations to situate a business in manufacturing for export? 

 Africa’s next Big 5 tells us one thing, only one thing, that Africa herself is the next big thing. Africa is home to some 30% of the world’s mineral reserves, 8% of the world’s natural gas and 12% of the world’s oil reserves. The continent has 40% of the world’s gold, and up to 90% of its chromium and platinum. The largest reserves of cobalt, diamonds, platinum and uranium are in Africa. The continent holds 65% of the world’s remaining arable land and 10% of the planet’s internal renewable fresh water source. Zambia, Namibia, Botswana and The Democratic Republic of Congo have copper, required for making components like alternators in motors and alloys in a gear box.  In fact, Africa is one of the most important sources of copper in the world, and is home to some of the most impressive copper belts.  

The Democratic Republic of Congo and Madagascar have cobalt and you cannot make car batteries without that. Nigeria, Libya and Equatorial Guinea have petrochemicals and therefore plastics. Seat covers, carpets, bumpers, electrical insulators, lamps, door handles, air vents, the dashboard and airbags are all made from that industry.   

Ethiopia, Kenya, South Africa and Nigeria have leather. Liberia, Ivory Coast, Cameroon and Nigeria have natural rubber for making tires, wiper blades, engine mounts, seats, hoses and belts.  Burkina Faso has cotton for interior decorations. Mozambique and South Africa have titanium for exhaust systems, suspension springs, valve springs, valves and connecting rods.  

Approximately 80% of the world’s known economic manganese resources are contained in the Kalahari manganese field in South Africa. Magnesium is a light metal that is becoming increasingly common in automotive engineering. It is 33% lighter than aluminium and 75% lighter than steel or cast-iron components. I use the example of the automotive industry to highlight not only the promising truth of Africa’s story, but also the opportunities that abound for partnerships with Austrian manufacturers in vehicle, machine and equipment, starting at least with setting up strategic regional assembly plants to feed the continent.  

The global chocolate industry is worth over 150 billion United States Dollars. West Africa supplies 70% of the cocoa beans for that, but most of the value in a chocolate bar is generated in Europe and North America. Austria has celebrated equipment manufacturing fame, and Ghana has premium cocoa, much sought after the world over. Why today, can’t we build partnerships to set up modern cocoa processing plants in Ghana to feed the continent and beyond. Why shouldn’t we?  

And today, if there was any opportunity for partnership– with the potential to turn Africa’s challenges into prosperity – to unleash the never doubted genius of the African entrepreneur – one with the ability to reduce significantly Africa’s dependence on everyone else for everything good – and one that has the answer to empower our women and youth once and for all – the African Continental Free Trade Area is. 

The AfCFTA remains by far, the boldest vision of the African Continent since the formation of the OAU now the AU, and if we are successful with its implementation – and we should – we will significantly reduce our reliance on imports, with a drastic shift to trading with and within ourselves.  

Touted as the new dawn of Africa’s political and economic integration, Africa’s free trade area will advance equitable development for all of Africa’s people. It addresses the challenges of small fragmented markets, adds value to Africa’s abundant natural resources, provides a boost in intra-African trade and will ultimately, promote economic diversification and industrialisation. It is the largest free trade area by number of states after the World Trade Organisation, connecting 1.3 billion people across 55 countries with a combined GDP of 3.4 trillion US Dollars.  

It would lift about 30 million Africans out of extreme poverty, boost the incomes of nearly 70 million people and boost intra – African trade. It would reduce all trade costs and enable Africa to integrate further into global supply chains – eliminate 90% of tariffs, and create a single market with free movement of goods and services, persons and labour, competition, investment and intellectual property. 

What we see today as Africa’s prospects have always been there and our economic integration, although long overdue, was always in the making. It was Kwame Nkrumah who led the struggle for an independent Ghana, which will inspire a movement of independence throughout the continent, and it was Madiba Mandela, that indomitable charismatic figure of Africa’s history, who will show in the end that integration starts and ends with us.   

Ours is to model our aspirations of economic integration along the spirit of yesterday’s Africa, where the agenda and the outcome were seen as the same. Fintech is currently the fastest-growing start-up industry in Africa, and the continent is home to over 500 financial technology firms; over 800 million Africans own a mobile phone, with electronic payments increasingly displacing cash.  

Today, by the power of technology, whether you’re in Lagos or Accra, business with a partner here in Vienna is only a click away, and we must leverage that. In Ghana, under the government’s digital transformation programme, several policies and initiatives have been launched to move the country further along the digitalisation agenda.   

Through the Ghana Interbank Payment & Settlement System, government has created an interoperable mobile money payment system used by financial institutions and third-party payment providers to provide seamless financial services to people and businesses across the world. 

We recognise in Ghana, the role of digitalisation as a means to an end, and we have employed several digitalisation systems to increase efficiency, root out corruption and enhance revenue mobilisation. For example, the Paperless Port System introduced in 2017 to streamline import and export at our ports by automating processes using digital tools and fintech payment platforms has eliminated the delays at our harbours.  

With 60% of our land mass being arable, opportunities within the Agriculture and Agribusiness value chains are lucrative low-hanging fruits. Our agricultural sector stands out in West Africa; as Ghana is ranked 1st ahead of its competitors,Nigeria and Cote D’Ivoire, 3rd in Sub-Saharan Africa, and 59th globally in the Global Food Security Index 2019. And so, there is opportunity in Ghana for the production of agricultural inputs such as improved seeds and agrochemicals, including fertilisers, pesticides, and herbicides. As we seek to transform our economy from a raw material exporter to one of processing, there are opportunities for establishing large-scale processing facilities for fruits, vegetables, cash crops, industrial crops, food crops, fish, and meat.  

There are also opportunities in the establishment of commercial packaging facilities for handling of fruits and vegetables, provision of post-production services, including marketing and distribution (transport, packaging, storage facilities and cold vans), establishment of greenhouse villages comprising training centres with commercial production units, and agritech support services including use of drones, weather intelligence and e-extension services. Following the discovery of oil in 2007, with an expanded Ghanaian private sector and foreign direct investment, we have seen a significant increase in non-resident Ghanaians and foreign home buyers. The Ghanaian housing market has expanded to meet this need with developers operating in the mid to high–end housing segments.  

But we still face a housing deficit of some 1.8 million homes, the vast majority in the affordable housing segment. The opportunities within Ghana’s real estate and housing sector are therefore mostly in affordable housing and there are additional prospects in recreational areas and shared access developments, malls and formal retail centres. In the renewable energy sector, there is so much to be done by Service providers – energy audits and energy management strategies, power factor correction, electrical load management, fuel substitution; 

Equipment suppliers – energy monitoring, cost-competitive energy for the poor, solar energy systems for schools in rural communities; as well as Sector suppliers – increased LPG, solar dryers for exportable farm produce, biogas production, and mechanical wind pumps to replace diesel for irrigation. 

In the area of telecommunication, broadband connection in Africa is expected to reach over a billion by the end of 2022, while the continent’s smartphone market penetration is expected to reach 636 million. The good news is that Ghana’s telecommunication sector is ripe for investment. With a high literacy rate, a youthful population and access to the internet, Ghana is shaping up to be a favourable destination for Business Process Outsourcing, with key global players setting up in Ghana, and there are opportunities also for new entrants in the:  Supply of High-Tech Telecommunication Equipment and development of 5G technology to provide high-speed internet services to complement government’s digitalisation agenda. 

Government has embarked on a Ten – Point Industrial Transformation Agenda aimed at maximising the investment potential of Ghana. They include; the National Industrial Revitalisation Programme, the One District One Factory Programme, Export Development; Strategic Anchor Industries, Industrial Parks and Special Economic Zones, Development of Micro, Small and Medium Scale Enterprises, Domestic Retail Infrastructure Enhancement, Industrial Sub-contracting Exchange, Improving Public-Private Sector Dialogue and Business Regulatory Reforms. 

 The Business Regulatory Reforms which are currently being undertaken by the Ministry of Trade and Industry are to ensure transparency and stability in the investment climate of our country. The evidence shows that such a climate is a sure way of attracting investment into an economy. The Strategic Anchor Industries, which include an integrated Aluminum Industry, Iron and Steel Industry, Automobile and Vehicle Assembly, Petrochemicals, 

Manufacturing of Machines and Machine components and Agro – processing, constitutes His Excellency the President’s vision of creating alternative growth poles to drive his industrialisation agenda. The Ministry of Trade and Industry in taking a lead role to help grow the economy post Covid, is poised to spearhead and coordinate even more aggressively, all ten Anchor Industries. 

The National Export    Development  Strategy was launched three years ago by the President of the Republic, His Excellency Nana Addo Dankwa Akufo-Addo, as a tenyear plan to increase Ghana’s non-traditional exports to $25.3 billion United States Dollars by 2029. The Strategy focuses on promoting an export-led industrialising economy, well positioned to build synergies with the Government’s flagship programmes: One District One Factory, Planting for Food and Jobs and Planting for Export and Rural Development, and the data shows that significant gains are being made already, led primarily by Dr. Asabea’s Ghana Export Promotion Authority. 

The development of Industrial Parks and Special Economic Zones is an integral component of the Government’s industrialisation agenda. To emerge strongly from the havoc of the pandemic, and restore the impressive trajectory of Foreign Direct Investment, Ghana Freezones Authority under the leadership of Amb. Mike Oquaye, has accelerated efforts to build Industrial Parks and Special Economic Zones across the country, and the process of developing a policy framework, institutional structure and the regulatory mechanism to support the establishment of these Parks and Special Economic Zones, has been initiated. 

Africa’s Agenda 2063 is a manifestation of the PanAfrican drive for unity, self-determination, freedom, progress, and collective prosperity, and by 2063, Africa is expected to show improved standards of living; transformed, inclusive and sustained economies, increased levels of regional and continental integration; a population of empowered women and youth, and a society in which children are well cared for and protected.  

African countries trade more outside the continent than within, and we must do everything within our means to change this. Why must cotton from Burkina Faso travel across the Mediterranean, only to be purchased by a Ghanaian manufacturer from a European Agent?  Trade Policies, whether for Botswana, Malawi or Ghana, must be harmonised to promote a coordinated trade growth, coherent with, and geared towards boosting intra-African trade. We must design Trade Facilitation Regimes to expedite the movement of goods across existing corridors and reduce the time and cost for goods to move from one destination to another.  

Small and Medium Enterprises, from Cairo, to Cape Town, deserve more tailored support from their governments. We must enhance their productive capacities if we are to increase local production for an integrated regional and continental value chain. African governments must carefully identify traderelated infrastructure deficits and invest in the development of innovative, legal and financial mechanisms for multicountry infrastructural projects. Here, I emphasise transportation, communication and energy infrastructure.  

African Financial Institutions must design special products for boosting trade among ourselves, and trade information in Angola must be readily available to a trader in Kigali, Maputo or Bamako. And never again, should visa and immigration rules prevent legitimate traders from traveling across any part of the continent with their own goods. Why must a trader be stuck in Dakar when her goods are transiting from Yaounde to Windhoek? We must urgently operationalise existing policies and protocols on free movement of people and labour migration.   

The fourth industrial revolution beckons, and this one in particular must not pass us by. As host to the Secretariat of the AfCFTA, and a long standing unrelentless and unrepentant pioneer of Africa’s integration agenda, Ghana especially, cannot fail her people and the entire continent in this regard, and we must take advantage of the full spectrum of our resources to build partnerships for industrialisation, and rapidly. 

That is why this forum is important, and that is why we must think and work together as partners. Strategic Partnerships is the next big thing, and it should be the focus of this forum for the next few days.  

By Hon. Herbert Krapa,

Deputy Minister for Trade and Industry, Ghana.


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