By Tenbite Ermias And Acha Leke – From BDlive

African incomes are rising, and consumer and business spending is vibrant — but the continent’s manufacturers are still not taking advantage of dynamic home and regional markets. This is a large lost opportunity.

New research from the McKinsey Global Institute finds that Africa could nearly double manufacturing output in less than 10 years, creating as many as 14-million wage-paying jobs.

Overall, African economies have underperformed. Value added from manufacturing increased at a rate of 2.5% a year between 2000 and 2015, far weaker than Asia’s 7.4%. Today’s $500bn of output is heavily concentrated in five countries: Egypt, Morocco, Nigeria, SA and Tunisia. And manufacturers sell comparatively little to the rest of Africa — just 10%.

But Africa could nearly double its output to an estimated $930m in 2025 — manufacturing output would grow at 6.4% a year, triple the rate achieved since 2000. Three-quarters of the opportunity to boost manufacturing comes from serving home markets — producing at home more of what Africa currently needs.

Africa imports a third of the food, beverages and similar processed goods it consumes. By contrast, member states of the Association of Southeast Asian Nations (Asean) import about 20% of such goods from outside their region, and the South American countries in the Mercosur trade bloc import about 10%.

Africa has the raw materials to make cement in abundance, and yet it imports 15% of its needs compared with 5% in the case of Asean and Mercosur.

Yet consumer and business spending is growing robustly. African consumers and businesses already spend $4-trillion a year. By 2025, that will rise to $5.6-trillion.

Read more at BDlive