Recent shifts in the industrialised countries have resulted in changing production systems and patterns that have seen investments and jobs in the manufacturing sector move to emerging manufacturing hubs such as Vietnam, Indonesia and Malaysia in Asia. Chinese competitive advantage in manufacturing is now eroding, as her industrial labour costs are skyrocketing and newly imposed tariffs seem to benefit the “Four Asian tigers”—Hong Kong, Singapore, South Korea and Taiwan. These countries are witnessing the return of companies that had initially moved basic manufacturing to China due to lower costs and access to clustered services.

The current global shift and exodus of companies from the traditional “manufacturing giants” and diversification into the knowledge intensive economy (i.e., concentration on high value products) creates an opportunity for Africa to attract export-led investments that will boost her industrialisation and structural transformation agenda.

The main goal of this assignment was to conduct a comprehensive assessment of emerging trends and global shifts in trade and investment focused on boosting export- led industrialisation in East and Southern Africa (ESA) countries. Specific goals of this assignment included:

  • Examining the status of the current trends in industrialisation and manufacturing in China and emerging economies in Asia resulting in the identification of priority sectors and clusters likely to attract investment and drive industrialisation in the ESA countries;
  • Providing relevant and useful policy lessons and development recommendations for ESA countries to position themselves to attract strategic investments in manufacturing for industrial development, job creation and broader structural transformation;
  • Developing blueprints with detailed country-specific plans, strategies on sector and cluster development, practical best practices for ESA countries to take advantage of shifting trade and investment patterns in China and emerging economies in Asia.

Services provided by Imani Development included:

Phase 1 – Formative research and shortlisting analysis

  • Comparative analysis of the Eastern and Southern Africa’s current industrialisation status, business environment, Government and private sector existing or planned interventions and opportunities for export-led industrialisation as compared to industrial hubs in Asia and high performing African countries. This analysis shall include country snapshots, regional overview, and a summary comparison table. The following countries may not be included in the comparative analysis: South Sudan, Democratic Republic of Congo, Somalia, Somaliland.
  • Analysis of the AfCFTA’s current state and its implications for industrialisation and regional trade, assessment of issues and opportunities, and identification of the steps that Eastern and Southern African countries need to take to benefit from the AfCFTA.
  • Research support to the shortlisting of sectors and industries that the region (targeting TMEA’s countries of operation) could focus on looking at both short- and long-term opportunities. This includes profiling different value chains against the shortlisting criteria agreed upon.
  • Reviewing the shortlisting criteria with a view to ensuring it has an appropriate gender lens; peer review of the sector shortlisting process.

Phase 2 – Options analysis and strategy development

  • Based on the findings from Phase 1, lead on Phase 2 outputs for at least two countries or alternatively one to two regional locations.
  • Providing investor sounding support, including conducting Key Informant Interviews with some of the targeted investors to obtain insight on pre-requisites informing their selection of an investment destination, and likelihood of establishing operations in the region.
  • Developing a country mini case-study of at least one good performer in the region (e.g Mauritius).

Phases 3 – Design of intervention plans (per country)

  • Reviewing the country and regional strategies produced (including the recommended pipeline of projects) to ensure they are appropriately gender sensitive.
  • Based on the findings from Phase 1, lead on Phase 3 outputs for at least two countries or alternatively one to two regional locations. The content for each of the country intervention plans would likely include: Summary overview and context; Priorities and progress in the manufacturing sector, including in attracting inward investment; Political economy constraints; Current initiatives and institutions driving industrialisation (with capacity assessment); Value proposition; (High level) priority projects; TMEA’s opportunities to support; Concise investor outreach plan; (High level) budget; Risks