By J. Wendell Addy
Another assembly plants? We need to manufacture components in Africa—then we’re talking!
At the 2024 UNGA Corporate Council of Africa sideline meeting, I ran into the former Nigerian Minister of Trade. We discussed trade integration and leveraging economies of scale on the continent. I recalled that in the 1960s, Liberia exported iron ore to Delta Steel in Nigeria for transformation—a model worth rekindling under AfCFTA. My son, Axel Addy, a former Trade Minister in Liberia, joined me, and the former minister from the previous administration immediately called an industrialist to join our conversation.
This brings me to the rush to establish free economic zones in Africa and the prevailing notion that assembly plants are economic boosters simply because they create jobs. But consider this: shouldn’t the labeling reflect where real value is added? For example:
Assembled in Nigeria, 100% of Parts Made Outside Africa
Manufactured in Nigeria, Made in Africa
Made in Nigeria, Product of Africa
Overcoming Barriers to Economic Independence
Africa’s pursuit of economic independence is hampered by several challenges: inadequate governance policies, insufficient data on available raw materials, and a dysfunctional education system that fails to equip our workforce with the academic and technical (TVET) skills needed for industry, business, and the public sector.
A few years ago, a friend asked for my views on whether my country – Liberia, should revert to the USD or maintain the Liberian Dollar. In exploring the issue, I encountered a World Bank study that supported my long-held argument: Liberia—and many African nations—do not own or co-own the materials they export. Historically, a nation’s export figures were used to determine its ability to service foreign obligations. However, this approach failed to recognize that ownership of exported materials—and the associated remittances—remains abroad.
Another World Bank study noted that to stabilize a local currency, at least 30% of export earnings should flow back into the country. In reality, however, foreign direct investments (FDIs) retain between 90% and 100% of export earnings offshore. Moreover, the modest inflows from royalties and taxes—royalties often around 3%—are typically allocated to support foreign missions or select national priorities.
The solution to Africa’s economic disparities and social challenges lies in redefining FDIs within the frameworks of Regional Economic Communities (RECs) and AfCFTA protocols, all within a conducive business environment.
Embracing Food Sustainability and Local Production
While food sustainability is beginning to take root in Africa—with innovative agribusiness initiatives and local food production reducing dependency on imports—it’s clear that our industrial strategy must extend beyond agriculture alone. Producing components and durable goods locally is essential. By manufacturing the parts that support modern agricultural equipment and infrastructure, we not only enhance food sustainability but also bolster the overall resilience of our economies.
Local production of durable goods—ranging from industrial components to high-quality consumer products—creates jobs, fosters skill development, and reduces our reliance on imported goods. This integrated approach ensures that progress in food sustainability goes hand in hand with industrial advancement, ultimately building a stronger, more self-sufficient Africa.
A Broader Vision for Africa’s Wealth
I often state these thoughts:
There is a gold rush in Africa, yet the people rushing for gold are not Africans.
While Africa holds between 44% and 52% of the world’s total gold deposits, not one African country ranks among the top 10 in gold reserves.
A recent report estimates that, at 2024 market values, the total value of gold held in reserve facilities is about $7.5 trillion. Africa’s percentage holding is very negligible.
Bill Frank Ebonyi’s book, The Trouble with US is US, aptly captures our collective mindset. According to Bill, we often fail to understand or appreciate governance models that uplift everyone, instead succumbing to sycophantic practices that ultimately harm our societies. The question remains: which direction are we headed?
From the 1960s to around 2010/11, various types of aids and economic interventions SAP, PRS —although well-intentioned—often compounded existing challenges. Later, several types of self-driven national initiatives emerged. While these programs were commendable in intent, their success has been hindered by a lack of political will and the absence of committed implementers.
For Africa to achieve true economic independence, we must move beyond merely assembling products. Embracing full-scale manufacturing to produce components, durable goods, and even support food sustainability initiatives will add real value to our abundant resources—ensuring that Africa’s wealth benefits its own people.
This is the pathway to economic inclusion, development to secure lasting peace and stability.
About the Author:
Mr. J. Wendell is an accomplished Liberian and African businessman, former president of the Liberia Chamber of Commerce (LCC) and founding president of the Africa Private Sector Summit (APSS), and the proud father of former Liberia’s Minister of Commerce and Industry, and World Trade Organization expert, Hon. Axel Addy.
