Beyond Value Addition: Why Africa Needs Regional Production Systems, Not Fifty-Four Factories

Africa’s ambition to move beyond exporting raw materials and capture more value from its natural resources requires more than building factories within national borders. In this article, Collins Nweke argues that the continent needs integrated regional production systems that pool capabilities, attract investment and create competitive industries. Drawing lessons from Zambia and the Southern African Development Community, he makes the case for regional industrial cooperation as a pathway to genuine economic sovereignty.

After waving goodbye to our Business Forum delegates in Kortrijk, I boarded the train home with a question that had accompanied me throughout the week. I had coordinated their visit to the city’s technology and innovation expo, part of our Nigeria Belgium Luxembourg Business Forum programme. Now, away from the meetings and the responsibilities of hosting, there was time to consider what our conversations amounted to.

My reading material was hardly an escape from the subject: Political Economy of Industrialisation in the Context of Regional Integration: Zambia and the Southern African Development Community (SADC). As I read, the Nigerian, Belgian and Luxembourgish business and institutional leaders with whom I had spent the week remained very much in my thoughts. Across our conversations, one issue had repeatedly drawn us back. Africa wants to retain more value from what it produces. Its entrepreneurs want to manufacture, process and compete. Its partners speak increasingly of investment, resilience and mutually beneficial cooperation. But what connects these ambitions to a functioning factory and connects that factory to a competitive production system?

In my recent Proshare column, where I wrote on “Power Before Prohibition, What Nigeria Must Get Right on Its Proposed 30% Raw Material Value-Addition Rule,” I explored this challenge through Nigeria’s proposed domestic value-addition requirement. The central argument was straightforward: a country can legislate the obligation to process its commodities without building the industrial system that makes processing commercially possible. Electricity, appropriate finance, technology, skilled operators, logistics and credible buyers cannot be summoned into existence by an export restriction.

The Zambia–SADC study pushed that reflection further. What if the missing system cannot be built efficiently within one country’s borders? What if some national policies intended to secure industrial sovereignty end up obstructing the regional cooperation that would make it achievable?

The understandable appeal of resource nationalism

It is not difficult to understand the appeal of export restrictions, domestic-processing requirements and local-content mandates. Africans have watched their countries export cocoa and import chocolate; export crude petroleum and import refined fuel; export copper, cobalt and lithium while importing batteries, vehicles and energy technologies. The resulting frustration is legitimate. It is difficult to speak credibly of sovereignty when the most profitable, technologically sophisticated and employment-intensive stages of production consistently take place elsewhere. African governments are therefore right to insist that the next commodity cycle must produce more than extraction, royalties and export earnings.

But justified frustration is not yet an industrial strategy. A government may prohibit the export of unprocessed minerals, cocoa or agricultural products, but it cannot prohibit the economic consequences of inadequate processing capacity. If domestic factories cannot absorb available production, primary producers may face fewer buyers and lower prices. If electricity is unreliable, financing too expensive, logistics inefficient and markets uncertain, the processing obligation becomes a tax on producers rather than a platform for transformation.

The choice is therefore not between doing nothing and imposing an immediate ban. The more serious choice is between symbolic resource nationalism and sequenced industrial development. Before restricting exports, governments must know how much domestic capacity exists, what it can process competitively, what additional investment is required and how producers will be protected during the transition. The factory must not exist only in legislation. It must exist in the real economy.

Zambia and the warning of another commodity boom

The Zambia–SADC paper provides a sobering empirical counterweight to the optimism surrounding Africa’s critical minerals. Zambia has experienced repeated periods of strong global demand for copper. Yet mineral-led growth has not produced sufficient economic diversification or deep connections between mining and the rest of its productive economy.

Copper still accounted for more than two-thirds of Zambia’s export earnings in 2025. The problem is not a shortage of minerals or foreign interest. It is the weakness of the conversion system surrounding those assets: policy instability, constrained industrial finance, unreliable electricity, technological gaps, inadequate infrastructure and limited linkages between mining companies and domestic suppliers.

The study reports that less than one-fifth of the minerals produced within SADC are processor 9within the region. Much of the remainder travels to Asia, particularly China, for conversion into higher-value industrial inputs and finished products. Southern Africa possesses extraordinary mineral resources, yet the industrial ecosystems that transform those resources remain concentrated elsewhere. This is the danger facing the continent. The global energy transition could generate another African commodity boom without producing an African industrial transformation. New mines may open. Railways and ports may move larger volumes. African governments may welcome more Chinese, European, American, Gulf and other investors. But if the continent remains principally the location of extraction, its expanded geopolitical relevance will not necessarily translate into greater economic sovereignty.

The DRC–Zambia battery initiative illustrates both the opportunity and the difficulty. The two countries possess formidable copper and cobalt endowments and have committed themselves to developing a cross-border battery value chain. Yet producing batteries competitively requires much more than the two minerals for which they are best known. It requires additional inputs, refining capacity, reliable energy, research institutions, technical skills, standards, finance, infrastructure and access to downstream manufacturers and buyers. The lesson is not that the initiative is misguided. On the contrary, its regional character points in the right direction. The lesson is that mineral ownership is merely the first link in a much longer conversion chain.

From national factories to African production systems

The discussion must therefore move beyond whether every African country should process all its resources domestically. Not every factory must be national, and not every country can competitively perform every stage of every value chain. Some industrial facilities require production volumes, power supplies, technology, capital and markets larger than any single national economy can provide. If each African country attempts to reproduce the entire chain within its borders, the continent may create small, protected and commercially fragile plants rather than globally competitive industries.

An African production system would follow a different logic. Mineral-rich countries could anchor extraction and appropriate stages of processing. Countries with reliable and affordable electricity could host energy-intensive production. Economies with established manufacturing bases could specialise in components and final assembly. African financial centres could mobilise long-term capital, guarantees and foreign-exchange solutions. Universities and technical institutions could provide research, testing, certification and skills. Transport corridors would connect these functions to one another and not merely carry raw materials from mines to foreign ports.

Under such a model, the objective would not be to award every participating country the same factory. It would be to ensure that each country captures a fair, measurable and progressively more sophisticated share of the value chain. This is where the African Continental Free Trade Area must become more than a tariff-liberalisation project. AfCFTA should help create an African industrial geography: identifying complementary capabilities, aligning rules of origin, harmonising standards, supporting cross-border investment and creating sufficient demand for regionally manufactured products. Industrial sovereignty does not mean industrial isolation. Sovereignty lies in possessing the collective capacity to decide where value is created, how the benefits are distributed and how African firms and workers move into progressively more sophisticated activities.

The capability test for multi-alignment

The same reasoning should guide Africa’s engagement with competing external partners. Multi-alignment is valuable because it can widen the continent’s choices, diversify financing and reduce excessive dependence on any one geopolitical bloc. But multiplying partners does not automatically change Africa’s economic position.

If one partner finances a railway to evacuate ore, another purchases the ore, a third provides security around the mine and a fourth sells Africa the finished technology, the continent may have diversified its relationships without transforming its role. That is not strategic autonomy. It is diversified dependence.

Every external industrial proposal should therefore face a capability test. What productive knowledge will remain in Africa? Which African suppliers will be developed? Will local firms merely provide catering and transport, or will they enter engineering, components, maintenance and technical services? Who will finance working capital and technological upgrading? What research, testing and certification facilities will be established? Will the infrastructure serve multiple African industries or only one extractive project? Can the resulting products enter African and international markets competitively?

Technology transfer clauses are not enough. Africa should negotiate for industrial ecosystems: supplier networks, research partnerships, technical standards, management capabilities, local procurement, skills formation and access to buyers.

This is also where African governments must bargain collectively. External investors can negotiate more effectively when African countries compete against one another with tax concessions, separate standards and conflicting processing policies. Africa gains leverage when countries coordinate the allocation of value-chain segments, agree minimum development conditions and present investors with access to a large integrated market. Multi-alignment becomes strategically useful only when relationships with different partners contribute complementary capabilities to an African plan.

The journey beyond the factory

As the train carried me home from Kortrijk, the question about factories acquired a continental answer. Africa does not need fifty-four replicas of every refinery, smelter, battery plant or cocoa-processing facility. Nor should regional integration become an excuse for concentrating productive capacity in a small number of dominant economies while others remain suppliers of raw materials.

What the continent needs is an agreed industrial geography in which countries specialise, infrastructure connects, finance follows production and the benefits are transparently distributed. National governments must still build domestic capabilities, protect their legitimate interests and ensure that local communities participate. But they must do so within regional systems capable of reaching commercially viable scale.

The conversation that began with Nigeria’s proposed value-addition requirement therefore points towards a larger truth. Legislation may announce industrial ambition. A national factory may begin the work. But only a functioning African production system can convert raw-material ownership into durable industrial power. The next commodity boom must not simply give Africa more buyers, more corridors and more flags around the negotiating table. It must leave the continent with more knowledge, more productive enterprises, stronger regional markets and greater power over its economic future.

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