How Industrial Parks Are Powering Economic Growth in Africa 

Industrialisation has proved to be a catalyst for economic growth, boosting the financial security of the populace through job and poverty alleviation channels. Manufacturing, mining, energy generation, and building work are included in the industrial sector of most Sub-Saharan African countries. Even though Africa's economic growth has typically lagged other continents, these industrial sector subsets have significantly aided the expansion and development of most of the continent's economies.

Several developing and underdeveloped nations have benefited from manufacturing, which is perhaps the only development strategy that has so far been successfully used to create jobs, export revenue, and rapid and lasting prosperity. Due to the active promotion of manufacturing through targeted infrastructure, skill development, financial policy, building strong connections with agriculture and services in partnership with the private sector, and preparing for a more digital future, large-scale manufacturing has become present on the African continent and significant industrial capacity has gradually taken hold in Africa.

Since 2000, African countries like Tanzania, Ethiopia, and Rwanda have all experienced annual manufacturing growth rates of close to 10%, albeit from a low foundation. Exports of clothing and textiles from Sub-Saharan Africa to the United States rose by 18% from the first half of 2017 to the first half of 2018, and by a staggering 106% in Ethiopia, in part due to efforts to establish Special Economic Zones (SEZs).

Industrialization is significantly influenced by factors such as total natural resource availability (TNR), trade openness (TO), and financial development (FD). Because of this, governments from different economies must work to reinforce and amplify the factors that support industrialization. Large-scale potential currently exists for African manufacturing. Regional trade services have increased as a result of expanding African markets and the new African Continental Free Trade Area Agreement, supporting industrialization.

By fostering connections across the continent, especially in trade in services, which will, in turn, support the manufacturing sector, the African Continental Free Trade Agreement (AfCFTA), which has been signed by most African countries, offers a great opportunity to support economic transformation generally and industrialisation. Again, African nations may take advantage of the AfCFTA, expand manufacturing, and generate more productive jobs by embracing digitalization. Digital technologies have the potential to both enhance and create new value chains for African economies by reducing the unit costs of manufacturing, information sharing, and transactions. Again, African nations may take advantage of the AfCFTA, expand manufacturing, and generate more productive jobs by embracing digitalization. Digital technologies have the potential to both enhance and create new value chains for African economies by reducing the unit costs of manufacturing, information sharing, and transactions.

The manufacturing industry has been impacted by the fragmentation of production processes into tasks carried out by several businesses based in different countries. Services like finance, insurance, business, and transportation/logistics make up an ever-increasing portion of the cost of manufacturing overall and up to one-third of the value added that goes into exports. Making sure that manufacturing companies have access to affordable, complementary, and effective service inputs will have a significant impact on their productivity and ability to compete globally. Increased manufacturing competitiveness depends on having access to affordable, effective inputs. Manufacturing will advance because of the service protocols that were agreed upon and the ongoing discussions about investment and competition policy at the AfCFTA.

Many African leaders are eager to support manufacturing, in part because their countries have had such tremendous trouble importing medical supplies rapidly enough during the outbreak and in part to reduce dependence on uncertain commodities. They should start by taking lessons from earlier failures to achieve the greatest results. To protect domestic sectors, resist nationalizing businesses, support national champions, or put-up import obstacles. The continental free-trade agreement has equally been embraced by many governments and this is encouraging because it shows that orders from the nearby Congo are more likely to help a landlocked Rwandan mattress manufacturer flourish than they are from distant Japan.

For businesses to increase productivity, they also require dependable power, trained employees, and strong infrastructure. Governments should choose assets that diversify away from commodities since difficult decisions will inevitably need to be made. Building ports with access to industrial centers rather than remote mines would be necessary to accomplish this. To help businesses enter prestigious industries like auto manufacturing, several governments offer tax incentives. They could do better to concentrate on simpler goals, like processing food for local consumption or creating uninteresting goods like the packaging for neighboring countries.

If government and infrastructure are improved, more businesses may decide to construct factories in Africa to produce parts for global supply chains utilizing components from local vendors. Governments should mandate the development of investment promotion centers with a particular focus on changing the inflow of FDI to the value-added manufacturing sector. In particular, capital inflows like technology transfers could be directed toward promoting industrial development.

Rich-resource economies must safeguard the availability of their natural resources and look for ways to increase their output. The accumulation of natural resources and their usefulness for certain purposes could be aided by reducing environmental degradation and harmful activities. To meet the industrial sectors' needs for raw materials, efforts should be made to explore more industry-driven resources.

Trade liberalization policies ought to be focused on encouraging export-promotion tactics that acknowledge industrial development and import-substitution strategies that provide the industries with the necessary technology and inputs for production. The use of stronger and more strategic trade restrictions should also be considered. Africa's natural resources (mainly basic commodities) must be managed sustainably.

African central banks must maximize efforts to prioritize industrial development by establishing the necessary financial leverage for the industrial operators to seize chances to achieve sustainable economic growth through industrialisation. To do this, financial services to the industrial sector should be offered at low-interest rates, and the cost of financing for industrial production (manufacturing) should be significantly reduced to help capitalize on the sector's possibilities.

A similar structural change from an agrarian to an industrial economy is required for wealth accumulation. Presently, the growth and export potential of small manufacturers in emerging economies has created some level of enthusiasm. Although it is understood that this is not always the case, there is growing agreement that clustering helps small enterprises overcome expansion constraints and compete in distant markets. Clustering can be facilitated by the proper implementation of Special Economic Zones (SEZ) such as Industrial Parks (IP). Industrial Parks are zoned areas especially developed for industrial activities/businesses. These special economic zones have the potential to attract foreign investors and drive further industrialization. A special economic zone like the Dawa Industrial Zone takes the lead as the singular privately developed industrial park in Ghana that provides good infrastructure and facilities to investors and businesses. This fully serviced multipurpose industrial park is capable of housing all light and heavy industries in an enabling environment that accelerates economic growth.