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Boosting services sector productivity key for African growth -McKinsey: Africa has the potential to add another USD 1.4 tn to its economy if countries are able to increase productivity in the services sector, according to a McKinsey report. This would “create at least 85 mn new jobs across the continent by 2030, sufficient to absorb almost half of all new labor-market entrants.”
Demographics are on our side: The size of Africa’s industrial workforce has remained flat over the past 20 years but is expected to double by the middle of the century, adding another 800 mn people, Acha Leke, one of the report’s authors and McKinsey’s chairman for the Africa region, told CNBC Africa in an interview (watch, runtime: 8:03). In comparison, China’s workforce will shrink by 200 mn people, Europe’s workforce will decline and that of the US will stay flat.
New markets + boosting productivity could double revenues of the largest companies: African businesses have shown resilience in the face of declining FDI, reduced exports, and political instability. There are currently 345 companies on the continent that make USD 1 bn or more in revenue, according to the report. This could significantly increase should these companies get access to new markets and benefit from productivity gains: Their combined annual revenue could increase more than 50% to more than USD 1.55 tn by 2030, the report says.
African countries might have a better shot at becoming global leaders in EV manufacturing if they consolidate their efforts and position themselves as one regional market, rather than individual countries, industry experts suggest, according to Quartz. There’s already a handful of countries across the continent leading the march towards EV manufacturing, including South Africa and Morocco — already leading automotive players — with plans to set up mega and gigafactories. The continent could benefit from the African Continental Freetrade Agreement (AfCFTA) to set up “manufacturing nodes” in strategic points across the continent to improve cost-effectiveness and tap into resources in different areas, one industry player suggests.
Different countries have different benefits and resources to bring to the table: South Korea’s LG Energy Solution recently signed an MoU with a Chinese lithium component manufacturer to produce lithium hydroxide — which is a “key component in high-nickel, high-capacity EV batteries” in Morocco, giving Morocco a push forward in EV manufacturing. Meanwhile, countries with large mineral reserves — such as the Democratic Republic of Congo, Zambia, and Mozambique — could play a major role in providing the resources needed for EV battery manufacturing.
Could Egypt get a slice of that pie? State-owned El Nasr Automotive has been looking for an international partner to form a joint venture for locally-made electric vehicles for the past couple of years. After talks with Chinese firm Dongfeng fell through in 2021, the government began discussing a partnership with Ashok Leyland, a subsidiary of Indian conglomerate Hinduja Group. Private sector players are also jumping on the EV market, with Al Mansour Auto and General Motors saying late last year that they plan to partner on assembling EVs in Egypt.
