African White Goods: Manufacturing & Exports
Africa’s retail sector remains relatively under-developed at present, with most shopping still being done at traditional shops and markets. The formalisation of retail activities – already underway – will be a key trend underlying the sector’s expansion in the coming decade. Another key challenge for retailers and white goods sellers in particular is the high levels of poverty on the continent.
There are many reasons why Africa’s manufacturing sector is under-developed: limited access to effective and efficient labour; inadequate infrastructure; armed conflict, corruption and instability not being conducive to long-term capital investments; rising fuel and electricity prices (and associated issues with reliability of supply); competition with Asian and developed world counterparts; a shortage of domestic suppliers of inputs; and the high costs of importing and exporting goods, amongst other issues. Manufacturing exports account for around a quarter of the continent’s export revenues compared to a figure of 75% for East and South Asia.
Nonetheless, there are more than a handful of countries on the continent that rely on manufacturing for a notable part of their overall economic activity. These economics include (in alphabetical order. Algeria (oil refining, gas and food processing); Angola (oil refining); Egypt (textiles, cement products and automobiles); Ghana (aluminium smelting, cement, and agro-processing); Kenya (food canning, grain milling and sugar refining); Libya (oil refining, food and fertilisers); Morocco (textiles, electronic goods and automobiles); Nigeria (oil refining and cement); South Africa (energy and metal products); Swaziland (textile-related products), Tanzania (food and beverages); Tunisia (key industries include mechanical and electronic goods, textiles and agro-processing); and Uganda (agro-processing). There is no African country very dependent on the production of white goods. South Africa and Egypt represented the only two economies with major excess production of certain white goods and accounted for 87% of Africa’s white goods exports during 2011-13.
When adding Tunisia, this figure increases to 90%. Namibia and Swaziland combined accounted for a further five percentage points of these shipments, while the addition of Kenya and Morocco sees these seven economies representing almost 97% of white goods exports. Over the past five years, some three-quarters of these exported goods (by value) were cooling equipment: refrigerators & freezers and air conditioners. White goods exports as calculated in this report were valued at an average of US$470m during 2011-13. However, this represented less than 0.1% of the continent’s total export revenues for the period.