Textile manufacturing has long been viewed as a foundation for industrialisation in emerging economies. The sector offers a relatively low barrier to entry and lower labor costs, which many countries have used to build industrial bases and grow their economies. This strategy was most successful in Asia. The International Finance Corporation notes that the “Asian Tigers” rebuilt their postwar economies by mobilizing low-skilled workers in efficient factories, developing modern ports, and weaving together global value chains. Between the early 1960s and the mid-1990s, these nations transformed into textile powerhouses and later used that expertise to assemble complex goods ranging from t-shirts to satellites.
African nations test similar models
African countries have attempted to replicate this success. In 2024, Benin’s sovereign wealth fund and the Dubai-based Arise Integrated Industrial Platforms invested €550 million in the country’s textiles and apparel sector. Rather than exporting raw cotton for processing abroad, the goal was to produce garments domestically. This approach aims to capture more value locally, addressing a common issue where nations export raw materials and import finished products, missing out on more than 90% of the total value. Ethiopia has experimented with similar strategies, focusing on industrial parks to promote sector growth and broader industrialization.
AI offers a different path forward
The rise of artificial intelligence is challenging the consensus on how the continent approaches industrialization. Rather than simply replicating the Asian model, some believe Africa can harness AI and advanced technologies to accelerate a move into higher-value manufacturing. Kennedy Chengeta, an AI entrepreneur based in Pretoria, suggests that while AI won’t replace physical production tools like presses or kilns, it can replace the systems layer above production. “Most African manufacturers carry no legacy IT estate, which means a processor still running paper job cards can move directly to cloud-native, AI-native operations without the twenty-year migration debt a European mid-cap is still servicing,” Chengeta explains. This lack of legacy systems could be an asset, allowing smaller factories to adopt sophisticated production methods from the start.
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Dirk Willem te Velde, principal research fellow at the ODI thinktank, agrees that AI can increase efficiency but warns of potential divergence. He notes that while internet penetration and digitalization help African manufacturing, the same technologies often benefit non-African countries more rapidly. “The same level of internet penetration helps non-African countries faster than African countries, so you get divergence,” te Velde says. He also points out that robotization is advancing faster in China and South Korea. “Advanced economies are increasingly able to produce the same amount of manufacturing output with fewer people, with more AI,” he adds. Without intervention, there is a risk that AI-powered manufacturing will remain in richer countries, leaving African manufacturers to compete on lower value-added tasks.
Power and skills gaps remain critical
Energy policy is central to ensuring African manufacturers can keep up. Chengeta highlights the financial burden of unreliable power. Nigeria’s government has estimated manufacturers’ losses from power outages at around $27 billion a year. South Africa faces a similar issue through tariff escalation and load management. Factories, particularly those powered by AI or digitalized systems, cannot function without reliable electricity. To capitalize on this technology, the workforce must also be prepared. Africa has the youngest population in the world, with more than 60% under the age of 25. However, this demographic dividend will only yield economic growth if the workforce possesses the skills to operate and maintain advanced manufacturing technologies.
De Velde argues that a “window of opportunity” exists for Africa to leverage digital technology for industrialization. He estimates that by 2034, it will be cheaper to produce a garment with a robot and 3D printing in the United States than with a team of workers in Kenya. “Business as usual is not enough – that will just mean losing out in a relative sense to other countries,” he says. He suggests that African governments must take a more targeted approach to ensure the continent can compete and move up manufacturing value chains. This requires a coordinated strategy that addresses infrastructure, education, and technology adoption to prevent missing the next wave of industrial progress.
