Reindustrialising Africa starts with regional value chains

The Democratic Republic of Congo (DRC) and Zambia together hold one of the world’s richest seams of the minerals that power the energy transition. The DRC produces around 70% of global cobalt, alongside vast copper reserves; Zambia is Africa’s second-largest copper producer. On paper, this should have been the foundation for a continental value chain: ore mined in Central Africa refined locally into battery precursors, then processed further in industrial hubs like South Africa, which has decades of experience in catalytic converters and metallurgical engineering. 

The reality is much different. Most cobalt and copper leave the region in semi-processed form, shipped to Asia for refining and battery production. While Zambia has invested in smelters and refineries, and the DRC has announced policies to encourage local beneficiation, progress has been uneven, and the effect is that instead of a stitched-together value chain, the region operates as a set of parallel nodes, each negotiating separately with external partners, and each capturing only a slice of the value that an integrated chain could hold. It is a reminder that endowment alone does not create industry without the rules and investment to bind it together.

This “almost value chain” is a recurring pattern across the continent, and fragmentation is stifling industrialisation at precisely the moment it is most needed. Global supply chains are being rewritten under the weight of protectionism and shifting geopolitics: tariffs and subsidies in the United States, regulatory assertiveness in Europe, and a deliberate drive in Asia to secure critical inputs closer to home.

Africa is at risk of being confined once more to the role of supplier of raw materials rather than manufacturer of finished goods. Establishing regional value chains offers the clearest route out of that trap because they turn fragmented production into systems large enough to anchor investment. And there is appetite for it. 

In 2024, Unctad recorded a 75% increase in foreign investment into Africa, lifting inflows to $97 billion, with large-scale project finance rising in parallel as investors targeted energy and transport corridors. More recently, Saudi Arabia’s Vision Invest committed $700 million to Arise Integrated Industrial Platforms – a developer that finances and operates industrial parks across 14 African countries from Benin to Côte d’Ivoire. The capital will accelerate new logistics and export manufacturing zones, signalling a shift toward infrastructure built for regional production rather than fragmented national enclaves.

Investors are beginning to test the continent’s capacity to host scale, underscoring that capital investment works best when treated as a pan-African opportunity. The rationale is straightforward: no single national market can provide the scale required to absorb long-term investment in manufacturing, but regional systems can. Cross-border production networks lower costs, spread risk, unlock efficiencies in infrastructure use, and create demand ecosystems large enough to attract global players on competitive terms.

Governments are starting to recognise this and are adjusting policy accordingly. The AfCFTA’s investment protocol is pushing toward more harmonised rules of origin and dispute-settlement frameworks; national industrial policies in countries like Kenya, Nigeria, and South Africa are being rewritten with an eye to integration rather than isolation; and fiscal incentives are being deployed to draw investors into special economic and industrial zones designed to feed regional supply chains.

But there is a lot more work to be done. 

Intermediate goods are one of the most reliable indicators of industrial depth because they reflect both the supply of production inputs and the demand for processing within a region. Between 2019 and 2022, Africa’s exports of intermediate goods rose from $196bn to $312bn – a gain that points to stronger participation in global manufacturing systems and some early traction from AfCFTA’s trade reforms. Yet the structure of that trade reveals how far integration still has to go. Around 77% of these exports remain raw or semi-processed, with limited beneficiation before entering external production cycles, and only 12.8% are traded within Africa itself. Manufacturing’s share of GDP has also stagnated below 13% since 2020, slipping to roughly 9% today.

These figures suggest that while Africa is trading more, it is not yet trading differently.

Meaningful change will depend on developing regional value chains that link input supply to processing capacity and final production within the continent, a task that demands aligned industrial and trade policy across borders, targeted investment in connective infrastructure, mechanisms to formalise demand for regionally sourced inputs, deeper pools of patient capital, and workforce skills matched to regional industries.

As the Internationa Monetary Fund and World Bank Annual Meetings get underway, and with the G20 convening on the continent, African leaders have an opening to press for the policies that will determine investment flows for the foreseeable future. The focus should be on accelerating implementation of the AfCFTA’s frameworks for industrial strategy and intra-regional trade at a pace that matches the continent’s ambitions. With that foundation, regional value chains can move from promise to practice, strengthening industrial capacity and embedding Africa more firmly in the global economy.

Cheryl Buss is the chief executive at Absa International & Absa Securities UK

*** The views expressed here do not necessarily represent those of Independent Media or IOL.

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