“Across Africa, scores of tiny manufacturers have been going where most multinationals fear to tread. They not only make chocolate in Madagascar, but also leather shoes in Nigeria and hot sauce in South Africa. They’re testing whether a continent with the highest share of unexploited resources in the world, and the lowest per-capita income, can be fertile terrain for industry.
“For decades, Africans have produced what they do not consume and consumed what they do not produce,” says Andrew Rugasira, a Ugandan entrepreneur. Two years ago, his company, Good African Coffee, broke ranks with local bean exporters to open the country’s first instant-coffee plant.
Why Africa doesn’t make more stuff has been an enduring mystery of the global economy. As wages rose in manufacturing powerhouses such as China, many economists predicted that factories would flock to cheaper pools of labor in Africa, helping to spur the same sort of rapid industrial growth that lifted living standards cross Asia.
It hasn’t happened.
Africa’s economy has averaged solid 5% annual growth over the past decade, thanks to rising commodity prices and new consumer demand. The continent, however, accounts for just 1% of global manufacturing, compared with Asia’s 25%. Africa’s share of labor-intensive manufacturing—a vital source of jobs for underemployed farmers—is actually shrinking, according to a July United Nations report.” (source: Wall Street Journal, 24-Sep2011).