"Africa must finance its own industrialisation" – Prez. Mahama

President John Dramani Mahama has called for urgent and collective action to finance Africa’s industrialisation, stressing that economic freedom on the continent cannot be achieved without deep economic transformation.

Speaking at the Africa Trade Summit 2026 on Accra, President Mahama said Africa had reached a historic turning point, noting that the continent must break away from an economic model that limits it to exporting raw materials while importing finished goods.

“That model is a new form of colonialism designed to trap Africa in perpetual poverty,” he stated.

President Mahama emphasized that Africa’s industrialisation must be driven by its comparative advantages, particularly in manufacturing and agro-processing, which he said create jobs, raise incomes, build skills, and support inclusive growth.

Despite its vast resources, Africa’s share of global manufacturing remains below two percent, a situation he described as unacceptable.

According to him, many African economies remain stuck in low-productivity primary production, forcing millions of young people to migrate in search of opportunities.

“The question before us is simple: how do we finance Africa’s industrialisation at the scale and speed required?” he asked.

President Mahama identified limited access to long-term and affordable financing—especially for small and medium-sized enterprises—as a major obstacle, citing shallow financial markets, high interest rates, rising debt burdens, and extractive investment models.

He proposed a multi-pronged approach, beginning with improved domestic resource mobilisation through better revenue collection, stronger public financial management, and decisive action against illicit financial flows.

He also urged African countries to unlock institutional capital, noting that pension funds, insurance companies, and sovereign wealth funds across the continent manage hundreds of billions of dollars that could be channelled into industrial development through instruments such as industrial bonds, infrastructure funds, diaspora financing, and blended finance mechanisms.

President Mahama further called for stronger roles for African financial institutions, including the African Development Bank, to mobilise private capital and support regional industrial networks.

According to him, governments must actively attract private sector investment through public-private partnerships, risk-sharing mechanisms, and credit guarantees, while ensuring stable policies, transparent regulations, reliable infrastructure, and respect for the rule of law.

He added that development partners and multilateral institutions also have a role to play by providing concessional financing, guarantees, and insurance instruments to de-risk industrial projects, while Africa continues to push for reforms to the global financial system.

Touching on value addition and beneficiation, President Mahama lamented Africa’s long-standing practice of exporting raw cocoa, oil, cotton, timber, and minerals only to import finished products at much higher prices.

Using cocoa as an example, he noted that although Africa produces the majority of the world’s cocoa, it captures only a small fraction of the value of the global chocolate market.

In Ghana, he said deliberate steps are being taken to transition from a commodity-export economy to a value-added one, with a focus on agro-processing, manufacturing, and industrial clusters linked to the country’s natural resources.

President Mahama also highlighted Ghana’s efforts to assert greater sovereignty over its natural resources, citing the establishment of the Ghana Gold Board as a major milestone.

He revealed that before the Gold Board’s creation, only a fraction of foreign exchange from small-scale gold exports was repatriated.

However, since its establishment in April 2025, exports from the small-scale mining sector have increased significantly, with substantially higher foreign exchange returns to the central bank.

He added that local content laws now require foreign investors in the extractive sector to partner with Ghanaian companies.

President Mahama concluded by stressing that Africa’s industrialisation cannot succeed within fragmented national markets, calling for stronger regional value chains and investment in transport corridors to support seamless movement of raw materials, intermediate goods, and finished products across the continent.

On his part; Mr. Sam Jonah hinted that Africa stands at a historic crossroads and must urgently industrialize, deepen intra-African trade, and assert its economic self-interest or risk being sidelined in a rapidly fragmenting global order.

Sir Sam Jonah said the global economy is entering a period of “rupture,” where trade, supply chains and economic power are increasingly being weaponised by major powers.

Drawing on recent remarks by Canadian Prime Minister Mark Carney at the World Economic Forum in Davos, Sir Sam Jonah said the era of a predictable, rules-based global order was giving way to a “brutal reality” in which countries not actively shaping outcomes risk being exploited.

“If we are not at the table, we are on the menu,” he cautioned, stressing that Africa can no longer rely on exporting raw materials while others reap the benefits of value addition.

He noted that rising protectionism in the United States, China’s expanding economic influence, geopolitical tensions, and climate-related shocks were placing severe strain on African economies, disrupting exports, inflating costs, and deepening debt vulnerabilities.

These pressures, he said, were already eroding investment and diminishing opportunities for Africa’s youth.

According to Sir Sam Jonah, Africa’s long-standing growth model—anchored on commodity exports without industrial depth—has proven unsustainable.

“Industrialisation is not a luxury; it is our shield and our sword,” he said, arguing that without local value addition, Africa would remain trapped in low-value global supply chains and exposed to external shocks.

He pointed to the paradox of Africa exporting critical minerals, cocoa, oil and agricultural products while importing finished goods made from its own resources at far higher costs. This, he said, reflects a global system that rewards processing and manufacturing while penalising raw production.

Sir Sam Jonah urged African leaders to adopt what he described as a “boldly selfish” approach—one that prioritises African interests by insisting on mineral beneficiation, agro-processing, pharmaceutical manufacturing and industrial value chains located on the continent.

“Selfish does not mean exclusionary,” he explained. “It means creating jobs that dignify, wealth that circulates within our economies, and futures that inspire our people.”

Central to this transformation, he said, is the African Continental Free Trade Area (AfCFTA), which he described as Africa’s “lifeline” in a fractured world. However, he warned that the agreement risks remaining symbolic unless fully implemented.

He called for urgent harmonisation of standards, streamlined customs systems, improved infrastructure and strict enforcement of trade rules to unlock Africa’s vast internal market of over 1.4 billion people.

Sir Sam Jonah also highlighted priority sectors for industrialisation, including mining beneficiation, agro-processing, pharmaceuticals, infrastructure development and renewable energy, noting that Africa must move from being a supplier of raw materials to a producer of finished goods and innovation.

“Position in the value chain determines power. Volume alone is vulnerability,” he said.

He challenged African governments, financiers and private-sector leaders attending the summit to translate dialogue into action, commit to bankable projects, and ensure inclusive industrial growth that incorporates SMEs, women and young people.

As the summit opened under the theme “Financing Africa’s Industrialisation: Developing Industrial Value Chains, Beneficiation and Market Integration,” Sir Sam Jonah called for principled pragmatism—upholding sovereignty and sustainability while decisively pursuing Africa’s economic interests.

“The table is being reset,” he said. “Africa must claim its seat—not as a supplier of scraps, but as a shaper of the global economy.”

Taking her turn; Minister for Trade, Agribusiness and Industry, Hon. Elizabeth Ofosu-Adjare noted that Africa must take deliberate, well-financed steps to industrialise or risk remaining trapped as a supplier of raw materials in an increasingly protectionist global economy, has said.

She said the continent is at a defining moment, where strategic choices on financing industrialisation will determine whether Africa emerges as a global industrial powerhouse or continues to lag in value addition.

Addressing the opening session of the summit in the presence of President John Dramani Mahama, other African Heads of State, ministers, business leaders and development partners, Ofosu-Adjare noted that global industrial policy has undergone a major shift since 2020.

Citing data from the International Monetary Fund’s Industrial Policy Observatory, she said more than 34,000 industrial policy interventions were implemented globally between 2009 and 2023, largely driven by subsidies, as countries increasingly pursue supply-chain resilience, national security and strategic autonomy.

“The message is clear: industrial policy is back, and it is being financed aggressively,” she said.

According to the Minister, the key question for Africa is no longer whether to pursue industrial policy, but how to finance it effectively in the face of limited fiscal space and an increasingly fragmented global trading system.

She outlined lessons Africa can adapt from advanced economies, including the use of blended finance, strategic sector targeting, value-chain-driven support, and localisation policies.

She pointed to examples such as the United States’ Inflation Reduction Act, the European Union’s Green Deal, and China’s long-term state-backed industrial financing.

Against this global backdrop, Ofosu-Adjare said Ghana has adopted sector-specific industrial policies supported by innovative financing models, moving away from broad, generic incentives.

She identified textiles and garments, automotive components, and pharmaceuticals as priority sectors where Ghana has strong comparative advantages and the potential to develop full value chains.

In the textiles and garments sector, she said Ghana is leveraging employment opportunities, regional market access under the African Continental Free Trade Area (AfCFTA), AGOA, and the EU Economic Partnership Agreement, as well as high-quality cotton produced in the sub-region.

She highlighted the role of firms such as DTRT Apparel, UNIJAY, and other local manufacturers in building scalable garment manufacturing capacity, describing the sector as a strong foundation for job creation and regional leadership.

On automotive components, the Minister noted that Ghana’s Automotive Development Policy has already attracted more than $100 million in foreign direct investment, but stressed that assembling imported kits alone is insufficient.

“True industrialisation requires producing components, building upstream linkages, and developing skills and technological capabilities,” she said, adding that the global shift to electric vehicles presents new entry points for African countries.

In the pharmaceutical sector, Ofosu-Adjare said Africa’s heavy reliance on imports—over 70% of pharmaceutical needs—represents both a vulnerability and a major opportunity.

She noted that the African pharmaceutical market is projected to grow from $14 billion to $40 billion by 2030, creating scope for Ghana to serve regional demand through local production.

She said Ghana’s medicinal plant resources and existing pharmaceutical firms provide a strong base, but investment in active pharmaceutical ingredient (API) production and advanced manufacturing remains critical.

The Minister underscored the importance of development finance institutions such as Afreximbank, the African Development Bank, and the Trade and Development Bank in financing industrial projects through de-risking and blended finance.

She also called on governments to support industrialisation with stable macroeconomic policies, predictable regulation, efficient trade facilitation and targeted incentives.

Addressing concerns about the affordability of subsidies, Ofosu-Adjare acknowledged Africa’s fiscal constraints but said this makes blended finance and regional coordination under AfCFTA even more essential to avoid duplication and subsidy races.

“Africa has every right—and responsibility—to finance its own industrialisation,” she said, adding that success will depend on clear strategies, transparency, and the ability to mobilise private capital.

She concluded by stressing that Ghana’s industrial support programmes are about more than individual sectors.

“They are about proving that Africa can finance industrial transformation through intentional policy, strategic partnerships, and disciplined execution,” she said.

Story by: Joshua Kwabena Smith