Africa Doesn’t Need 54 Versions of Every Factory

By Raymond Chimhandamba

There is an understandable appeal in pointing to a factory and saying: we make this here. Factories create jobs, build skills, cut imports, generate tax revenue and give governments something visible to show for their industrial policies. Recent shocks to global trade have sharpened the appeal of domestic and regional production.

But the instinct can harden into a poor conclusion: that every African country should build every major industry within its own borders. The result is easy to predict. Neighboring states protect or subsidize near-identical plants, each serving a small national market. Inputs are imported, lines run below capacity and the final product stays expensive. A strategy for industrialization becomes a collection of idle national assets.

Africa does not need 54 versions of every factory. It needs 54 credible routes into industrial value creation.

A country need not perform every step, from raw material to finished product, to take part meaningfully in an industry. One may host capital-intensive primary production. Another may assemble or convert intermediate goods. Others may specialize in formulation, packaging, logistics, maintenance, testing or recycling. The goal is not industrial symmetry. It is productive interdependence.

When a Factory Becomes a Flag

Governments are not simply confused about economics. They want jobs, skills, foreign-exchange savings and control over strategic goods. They also know that regional supply can fail when currencies weaken, borders close or a neighbor rewrites the rules. The pandemic showed the danger of relying on distant suppliers for essentials, and some redundancy builds resilience.

But strategic redundancy is not the same as political duplication. A plant should not be judged only by whether the country imports the product today. The harder questions are whether demand can keep it busy, whether inputs can be sourced competitively, whether it can sell beyond its borders and whether the infrastructure around it can cope. A factory is not automatically an industrial strategy.

Concentrate What Requires Scale

Nigeria’s Dangote refinery shows why some assets must be enormous. The Lekki complex combines crude processing, polypropylene production, storage, pipelines, marine access and dedicated power. It reportedly cost about US$20 billion. It needed its own port, because no local facility could handle the weight of some of the equipment. It needed its own training programs, because the required skills did not exist in Nigeria. Few African countries could replicate an investment on that scale, and fewer still have the market, ports and financing to keep such an asset productive.

Yet Dangote’s strategy is not to sell everything from one giant site. The group plans a second large refinery in Kenya to serve East Africa, at a projected US$15 billion to US$16 billion, though questions remain over crude supply, financing, infrastructure and environmental approvals. If it proceeds, its significance will go beyond another refinery. It will test whether hard-won knowledge in financing, engineering and operating can be transferred, and whether the second build can be cheaper and faster than the first. That is how industrial capability compounds: the first factory produces fuel, and also engineers, project know-how, commercial relationships and the confidence to attempt the next.

Dangote also plans a storage terminal at Walvis Bay, Namibia, with capacity for at least 1.6 million barrels of petrol and diesel, intended to supply Namibia, Botswana, Zambia and Zimbabwe. A pipeline inland has been discussed. Refining in Nigeria, perhaps Kenya, and distribution from Namibia: this is not 54 refineries but a network in which each node has a different job. Production creates potential supply. Logistics turns it into a market.

A Small Country Can Hold a Strategic Position

Having spent a good part of my corporate career in the Coca-Cola system, I find it offers a very different lesson. Coca-Cola is made under license by bottlers across Africa, who mix, bottle and distribute the drinks locally. The proprietary ingredient is the concentrate, and for much of the continent it comes from Conco in Eswatini, which has been reported to supply about 60 bottlers in 20 countries.

Eswatini does not need to bottle every Coke sold in those markets, and no bottling country needs its own concentrate plant. One small country holds a pivotal upstream position; larger consumer markets add sugar, water, packaging, local pack sizes, warehousing, refrigeration and recycling. The model cannot be imposed on every industry, but it illustrates a principle that African industrial strategies often overlook: a country does not need to control the entire value chain to be indispensable within it. Eswatini’s contribution is no less industrial because the finished bottle is made elsewhere. The concentrate is what makes distributed production possible.

Assembly Should Be a Beginning, Not a Ceiling

Volkswagen splits its African footprint by role. Its Kariega plant in South Africa does full-scale manufacturing, while lighter assembly operates in Ghana, Kenya and Rwanda. The Accra plant assembles vehicles from semi-knocked-down kits shipped from South Africa, and Volkswagen has linked it to the idea of a collaborative West African automotive hub in which countries play different roles. For small vehicle markets, that is more realistic than trying to replicate stamping, welding, painting and a full supplier base overnight.

The difficult question is whether assembly is a first step or a permanent ceiling. If kits, components, tooling and engineering stay imported indefinitely, the local operation captures only a sliver of the value. The answer is not a Kariega in every country. It is a credible route to deeper participation through components, vehicle adaptation, tooling, maintenance, technician training and regional suppliers. Not every country needs to occupy every stage of a chain, but none should be condemned to remain merely a consumer.

Adaptation is Industrial Value, Too

Much value is added after primary production but before the customer. OCP Africa, for example, pairs large-scale phosphate production with soil mapping, laboratory analysis, field trials and local blending, including in Nigeria, to tailor fertilizer to particular soils and crops. The core chemistry may be made in one place; formulation and blending create another layer of value elsewhere. Consumer goods work the same way: different pack sizes, local labeling, and prices matched to how people earn and spend. This work is sometimes dismissed as secondary to “real manufacturing.” It should not be. Adaptation often decides whether a sound product succeeds or fails.

The Value of Being a Node

Rwanda’s Kigali Logistics Platform, operated by DP World, combines container handling, warehousing, customs clearance, regional trucking, cold storage and distribution, linking Rwanda to Kenya, Tanzania, Uganda and eastern Congo. Its worth is not measured only by what Rwanda makes, but by the trade that becomes possible because goods can be stored, consolidated, cleared and moved reliably. It lets smaller firms hold less inventory and reach markets too small to justify their own factories. That is no consolation prize. In some value chains, the logistics node is what makes several factories viable.

Industry also continues after the machine is sold. Barloworld’s Caterpillar network in Southern Africa offers technician training, spare parts, monitoring, maintenance, oil analysis and component rebuilding; its South African rebuild center is described as the largest in Caterpillar’s global dealer network. The excavator may be made elsewhere, but keeping it working for thousands of hours is an industrial capability in itself. The factory creates the machine. The service ecosystem keeps it economically useful.

The Politics Cannot Be Ignored

Regional specialization may make commercial sense, but it is a hard political sell. A government may reasonably ask why the main plant should sit in a neighboring country while its own citizens become customers. Governments answer for domestic jobs, revenue and foreign-exchange pressure, not for the theoretical efficiency of a continental chain.

Tariff cuts under the African Continental Free Trade Area (AfCFTA) cannot settle this alone. Countries need confidence that corridors will stay open, that rules will not shift unpredictably and that the gains will not pool permanently in a few industrial centers. Integration must not become centralization by another name. A hub-and-spoke model is developmental only if the spokes acquire capabilities of their own, in components, assembly, packaging, warehousing, maintenance, testing or specialized services, and if those capabilities deepen over time. Specialization without progression becomes dependency. Duplication without scale becomes industrial theater. Africa must avoid both.

What Lenders Should Ask

This argument changes how projects should be judged. A development finance institution weighing a new factory should look beyond the sponsor, the machinery and projected national demand. Are neighboring countries financing identical capacity? Is the project designed for a national or a regional market? Can trade corridors support that ambition? What utilization is realistic, and can the plant compete without permanent protection? Which functions could be distributed across other countries, and what storage, testing, maintenance or distribution investments would make the factory viable? Will it deepen regional capability, or merely add another production line?

The bankable unit may not be the individual factory. It may be the regional value chain around it: primary manufacturing in one country, conversion in another, a logistics hub in a third and technical support serving them all. Individually, such investments look smaller and less dramatic. Together, they form a sturdier industrial system than several disconnected national plants.

From Identical Factories to Connected Industries

Africa’s industrial future does not lie in choosing between total self-sufficiency and permanent import dependence. There is a third path: connected regional industries in which countries hold different but commercially meaningful positions. The guiding principle is simple. Concentrate what requires scale. Distribute what creates proximity, adaptation and resilience.

AfCFTA will become industrially meaningful when countries can specialize without becoming permanently dependent. Africa does not need 54 refineries, 54 integrated car industries or 54 fertilizer complexes. It needs regional value chains that let countries participate at different levels, build capability and capture more value over time.

The goal is not for every country to make everything. It is for every country to have a credible way to make something matter.

Raymond Chimhandamba is a Johannesburg-based consultant, writer, and speaker specializing in African industrial development, manufacturing value chains, and investment opportunities. He is director of Handas Consulting and founder of Kunakisa Recycling, with expertise in market entry, manufacturing localization, due diligence, absorbent hygiene products, nonwovens, recycling, and the commercial use of agricultural waste. He has contributed more than 40 articles to Nonwovens Industry Magazine and writes for International Fiber Journal. He has also spoken at international industry events organized by INDA and EDANA. Raymond is currently writing Asymmetric Africa, a book examining overlooked opportunities in African markets.