Africa still has a long way to go to achieve industrialisation, the Business Council for Africa has highlighted, in its '2025 Annual RED Index of Industrial Development in Africa'. (RED stands for real economic development).

Currently, only four of the continent’s countries are capable of sustaining industrial growth, namely Egypt, Morocco, Mauritius and South Africa. Two more, Nigeria and Rwanda, have made important progress towards this status, but do not yet meet all the necessary requirements. Most African economies, when it comes to industrialisation, are either “stalled” or “vulnerable”.

“Industrialisation is the outcome of structural readiness,” highlighted the index report. “Nations do not transform because they aspire to; they transform when the underlying capabilities of the economy allow productivity, scale, innovation, and global competitiveness.”

Rooted in the historical economic paths of countries such as Brazil, Ethiopia, (South) Korea, Malaysia, Morocco and Vietnam, the RED index identifies the factors that always underlay successful industrialisation.

“This is not just an index,” asserted Business Council for Africa chairperson Arnold Ekpe. “It is a call to action – for African policymakers, investors, and businesses to take ownership of Africa’s industrial future and commit to the structural changes required to deliver sustained growth.”

There are three “decisive dimensions” for achieving industrialisation, and the index usea these to evaluate African economies. These dimensions are “Engines of Industrialisation”, “Accelerators” and “Decelerators”.

There are seven “engines” needed to drive industrial development. The first of these as a high-growth mindset. Such a mindset becomes apparent in national ambition, long-term consistent policies, institutional discipline and allows governments to take difficult decisions, give priority to productive investments, and maintain policy direction even when it does not appear to be showing results. The second engine is electrification. The third is strong local financial institutions, such as large banks and solid development finance institutions, for only they can mobilise the long-term finance needed for industrial projects. The fourth is digital broadband, which is now essential economic infrastructure. Fifth is good transport systems, to ensure efficient logistics. Sixth is the need to develop national champion businesses, for they provide scale, trained workers, invest in research, and prove local companies can compete globally – as examples, the report cited Samsung, LG and Hyundai in Korea, Embraer and Vale in Brazil, OCP in Morocco, and Petronas in Malaysia. And seventh, science, technology, engineering and mathematics (STEM) education; African countries have to refocus their educational curricula towards STEM – currently the continent suffers a STEM deficit.

Regarding the accelerators of industrialisation, there are three of these. Again in the order listed by the index, the first of these is public-private partnerships (PPPs), which accelerate industrial development by mobilising capital, improving project execution, transferring expertise, and allowing governments to deliver large and complex projects. However, to work, they require the creation of clear legal frameworks, predictable regulatory frameworks and transparent procurement systems. Not all African countries have such frameworks; those that do, have successfully employed the PPP model; those that don’t, had struggled. The second is modern efficient digital payment systems – “one of the most underestimated accelerators of industrial growth”. Here is an oddity: Africa has successfully pioneered and deployed mobile money, but these systems are unevenly integrated into industrial value chains, industrial financing as still not fully integrated into this payment infrastructure, and the ability to execute cross-border settlements as limited. The third accelerator as the openness of the economy: being open to the global economy allows learning, attracts investment, expands markets, and exposes domestic companies to competition; those countries which open their economies strategically, and not passively, develop faster and create stronger industries.

“Decelerators [are] the structural constraints that can stall or reverse progress,” explained the report. “Across the continent, corruption and security instability remain the most significant decelerators, undermining institutional effectiveness and limiting the execution of industrial policy.”