Future of manufacturing in Africa

Posted on March 5, 2017 12:02 am

Manufacturing is seen as a sector that can provide much needed employment in Africa. Several countries are offering incentives to attract manufacturers in their markets with governments promising locals of long term employment opportunities  but because of technology, the true picture is different from such promises. Although Africa need to produce for its own markets, most of the factories being set up as well as existing manufacturers certainly are representatives of sunset industries, slowly but inevitably subsiding into economic irrelevance.Today, half of the costs of Internet of Things (IoT) projects related to manufacturing go on integration. In South Africa, many manufacturers are realising they already have IoT solutions and now they need to integrate them better to leverage the full benefits.The country’s manufacturers are not entirely ignoring the massive innovation and restructuring going on in traditional manufacturing. But there’s no doubt urgent changes are required to underpin the ability of manufacturing sector to survive and thrive in a now much more competitive world.That clearly includes industrial relations reform led by deputy president Cyril Ramaphosa. Yet the prospects for this seem to have receded in recent past. Nor do changes to industrial relations law seem like a priority during a new political zeitgeist dominated by debates over tax or energy policy or encouraging the start-up culture.In Kenya, although the outcomes in all such areas are also crucial to the manufacturing industry, manufacturers still face distinctly old-fashioned difficulties in delivering sensible outcomes from enterprise bargaining in their workplaces. So manufacturing in Africa need pragmatic, sensible changes to workplace relations it considers essential for the long-term viability of manufacturing.That combination of measured optimism about the future, but a clear warning about what’s needed now is significant.While manufacturing and its associated services now only contribute less than a quarter of Africa’s GDP, the general health of the sector also has a massive indirect influence on an economy increasingly dominated by services industries.It’s the future profitability and competitiveness of companies that will help determine the sort of jobs and skills that help round out African economy.

My view is that the industry is facing a profound productivity challenge. Labor productivity as well as the long-term failures when it comes to better training and skills development are among the most common challenges facing the sector. Also, establishing closer connections between research and industry and, producing enough local managers able to leverage global trends and opportunities.Such weaknesses only make it more urgent to improve efficiency and productivity on the factory floor at the same time.Manufacturers in Africa need to emphasise on restoring the ability of employers and employees to bargain directly and only on a limited range of matters affecting employment conditions. This is rather than the current system of having enterprise negotiations dominated by unions and often covering a much broader agenda following changes to the law introduced by African countries in the last decade.On technology side of manufacturing, people tend to forget that many manufacturers setting up in Africa already have IoT capabilities, and have had for years. But, manufacturers need to think carefully about which data performance tracking technology is most relevant to them. My advise is that for those producing large-scale capital equipment to be deployed in the field, new sensor enabled data gathering technology is a fantastic value-add. It will enable them to offer maintenance and services around the clock, in tough environments which is a serious competitive edge.In Africa, apprenticeships have become more important than degrees. The future of every industry depends on its people, and sometimes good people are hard to find especially in African countries. Across the continent, manufacturers are wrestling with a skills gap. Solving the skills shortages could bring in a new era of apprenticeships, in-house peer training and manufacturers working more closely with local education institutions to get younger talent into the industry. A recent study found over the next decade nearly 28 million manufacturing jobs in Africa will likely need to be filled. The skills gap is expected to result in 24 million of those jobs going unfilled.

In South Africa, the picture is similar as the skills gap is impacting manufacturer’s ability to meet customer demand. Most of them believe it will impact their ability to increase productivity and implement new technologies.A Kenyan study shows that a career in manufacturing in the country is ranked consistently low. Only a third of Kenyans said they would encourage their children to go for a manufacturing career. Thats why degrees are no longer relevant like apprenticeship and manufacturers need to start being more proactive in spotting and training talent young. Apprenticeships and in-house training will move up the agenda.For young talent, apprenticeships mean solid, bankable skills with no debt attached. For employers, it means the skills they really want. There are also new types of skills that will be particularly high in demand in the future. A factory will often consist of thousands of IoT sensors and a number of new devices connected to the Internet continuously gathering data. This will result in greater needs to analyse large data volumes and the automation of key processes based on data.Manufacturers in African countries are following the global trend by adopting the transformation by moving beyond the factory human capital.What I know is there is a new breed of transformative manufacturing companies setting up across the continent. These companies are often lean in operations, nimble and creative.They employ engineers, scientists, emphasise collaboration in research and innovation, are export-focused and are some of the most innovative. How Africa’s smart factory of the future will look is yet to be entirely realised. What I do know is that whilst they will be able to be autonomous to a degree, production processes will still need to be managed at a higher level in order to, for example, set deadlines, environmental goals and other objectives. Having a highly skilled and highly educated workforce will be an imperative to African countries.

Contador Harrison