Morocco has overtaken South Africa to become Africa’s leading industrial economy, reflecting the kingdom’s success in strengthening its industrial base, diversifying exports, and implementing sustained industrial policies over recent years, according to a new report released by the African Development Bank Group.
The finding was published in the 2025 edition of the Africa Industrialization Index (AII), launched during the Bank Group’s annual meetings in Brazzaville, alongside the inaugural Africa Industrial Investment Barometer report developed in partnership with WITBA Invest SA and Trendeo.
According to the report, Morocco achieved this progress through “sustained industrial upgrading” and by building a more diversified and export-oriented industrial ecosystem, while South Africa has experienced a gradual decline in competitiveness despite remaining one of the continent’s major industrial powers.
The report stressed that Morocco’s industrial rise is not only linked to attracting foreign investment, but also to its ability to retain a larger share of added value within the national economy through the development of local supply chains and stronger integration between industrial sectors.
It added that North and Southern African countries continue to dominate industrial activity across the continent and lead in exporting manufactured and technologically advanced products, while East, West, and Central African countries still face challenges linked to weak industrial integration and underdeveloped regional production chains.
The Bank Group described Africa as undergoing a “silent but irreversible industrial transition,” although the transformation remains uneven and concentrated in a limited number of economies that succeeded in building stronger industrial infrastructure and integrating more effectively into global trade networks.
According to the report, 41 out of 54 African countries improved their industrialization indicators between 2010 and 2024, contributing to a six percent increase in overall continental industrial performance. However, Africa still accounts for less than two percent of global manufacturing output.
The report also noted that the continent represents only 1.4 percent of global manufacturing exports, while manufacturing value-added per capita has fallen below pre-2014 levels, underlining the persistent structural challenges facing industrialization and economic transformation efforts across Africa.
Commenting on the findings, Ousmane Fall, Director for Industrial and Trade Development at the African Development Bank Group, said the report should not be viewed solely as a diagnosis of Africa’s industrial situation, but also as a “roadmap” for countries seeking to accelerate industrial transformation and strengthen local value chains.
He added that large-scale industrialization requires resilient infrastructure, sustainable financing mechanisms, and the capacity to generate added value within African economies instead of relying mainly on raw material exports, describing these elements as essential for achieving meaningful economic transformation across the continent.
Regarding industrial investment attractiveness, the Africa Industrial Investment Barometer found that North Africa ranked first across the continent in industrial diversification, investment attractiveness, and productive anchoring indicators, after attracting 56 percent of Africa’s cumulative industrial investments between 2020 and 2025, with Morocco and Egypt emerging as the region’s leading industrial destinations.
At the same time, the report warned that several African countries remain heavily dependent on exporting raw materials without developing downstream processing industries, citing examples such as Ivorian cocoa exported as powder instead of finished chocolate products, and Guinean bauxite shipped abroad without local processing.
The African Development Bank also called for moving beyond what it described as “shallow integration” based mainly on tariff reductions, urging African countries to focus instead on building effective economic corridors, strengthening cross-border infrastructure, and harmonizing industrial standards within the framework of the African Continental Free Trade Area.
The report further stressed that the future of African industrialization will depend largely on access to competitive and reliable energy, long-term local currency financing, investment in technical skills, and accelerated decarbonization efforts to avoid future environmental trade restrictions expected to be imposed by Europe and the United States in the coming years.
