Morocco has overtaken South Africa as the continent’s leading industrial economy, according to the 2025 Africa Industrialization Index (AII) launched on 25 May 2026 by the African Development Bank (AfDB) on the sidelines of its 2026 Annual Meetings in Brazzaville, according to a press release. Alongside the AII, the Bank Group released the inaugural Africa Industrial Investment Barometer (AfIIB), developed by WITBA Invest SA in partnership with Trendeo. Together, the reports describe what they call a “silent but irreversible” industrial transition across Africa. Both documents map where investment flows and how much value remains on the continent. Progress, however, is uneven and concentrated.
Africa’s industrial integration is low, with intra-African trade standing at just 14.4 percent of total trade. This reflects weak regional production linkages and fragmented industrial ecosystems. The AII 2025 assesses 54 African countries from 2010 to 2024. It finds that 41 countries improved their industrialization scores, with continental performance up six percent. The strongest gains were recorded among lower-performing economies, signaling convergence.
Africa still accounts for less than two percent of global manufacturing output and 1.4 percent of manufacturing exports, while manufacturing value-added per capita has fallen below pre-2014 levels. Morocco’s rise was driven by sustained industrial upgrading, export diversification, and strong industrial policy. South Africa remains a continental powerhouse, but its competitiveness has declined steadily. North and Southern Africa dominate output and export sophistication, while East, West, and Central Africa lag. North Africa drew 56 percent of cumulative continental investment between 2020 and 2025, with Morocco and Egypt at the forefront.
“This report is a roadmap as much as a diagnosis. It shows that 41 of our 54 countries are now moving in the right direction, but it also reminds us that industrialization at scale demands resilient infrastructure, value addition close to source, and finance mobilized on African terms,” said Ousmane Fall, African Development Bank Group Director for Industrial and Trade Development. The AfIIB warns that attracting investment does not guarantee that value stays local. Southern Africa’s automotive plants assemble largely imported kits rather than sourcing from local suppliers. West and Central Africa remain locked in first-stage processing, with Ivorian cocoa exported as powder and Guinean bauxite shipped raw. East Africa posts the second-highest productive-anchoring score.
Both reports stress reliable energy, cross-border industrial infrastructure, long-term local currency finance, technical skills, and harmonized standards as critical enablers. The AfIIB urges African industries to decarbonize now to avoid carbon border measures expected from Europe and the United States. For private investors, Africa offers above-average returns in construction materials, agro-processing, fertilizers, and generic pharmaceuticals. The AII calls for integration anchored in the African Continental Free Trade Area (AfCFTA). The 2026 Annual Meetings run in Brazzaville from 25 to 29 May 2026.
