Continental Africa has long been considered the land of future opportunity. With the predicted exponential growth in population, the continent is predicted to almost double its population by the year 2050. It is further projected that the economically active population on the continent would be one of the largest in the world. This will create a major demand for products and services, which will result in significant growth in industrialisation.
According to the African Development Bank Group, the continent’s overall real gross domestic product (GDP) growth is expected to average 3.8% and 4.2% in 2024 and 2025, respectively. This is higher than the projected global averages of 2.9% and 3.2%, and Africa is set to remain the second-fastest-growing region after Asia.
Sub-Saharan Africa, home to 30 per cent of the world’s critical minerals, is on the brink of a major transformation with the global move towards clean energy. The extraction of select minerals could boost the region’s GDP by 12 per cent or more by 2050, and advancing beyond exporting raw materials to developing and processing industries would present an even larger opportunity.
A regional strategy built on cross-border collaboration and integration can leverage the diversity of minerals and create a larger, more attractive regional market for much-needed investment. Moreover, structural reforms at the country level to nurture domestic firms in processing and supporting industries while steering clear of inward-looking industrial policy will amplify the gains from these minerals. Unlocking this potential can drive broader economic development, encourage technology transfer, and ensure sustainable, higher returns from the region’s critical mineral resources. Be it extraction or processing, this transition requires sound fiscal regimes and policies to manage these gains responsibly.
The African Continental Free Trade Agreement (AfCFTA), implemented in 2019, offers a tremendous opportunity for manufacturers across the continent to flourish and expand their reach. With simplified trade regulations and reduced tariffs, African companies can concentrate on their core competencies, including creating high-quality products that compete globally. This agreement promotes economic growth and prosperity for African countries and encourages industry cooperation and innovation. By harnessing the potential of this revolutionary trade agreement, manufacturers such as ACTOM can access new markets, attract foreign investments, and usher in a new era of industrial development in Africa. It is indeed an exciting time for the manufacturing sector, and with the right strategies and mindset, the possibilities are endless.
The African Continental Free Trade Agreement (AfCFTA) aims to achieve eight clearly defined goals:
- l To deepen the economic integration of the African continent, create a single market for goods and services facilitated by the movement of persons.
- l Create a liberalised market for goods and services through successive rounds of negotiations.
- l Contribute to the movement of capital and natural resources and facilitate investments building on the initiatives and developments undertaken by the State Parties and Regional Economic Communities (RECs).
- l Lay the foundation for establishing a Continental Customs Union.
- l Promote and attain sustainable and inclusive socio-economic development, gender equality, and structural transformation of the State Parties.
- l Enhance the competitiveness of the economies of State Parties within the continent and the global market.
- l Promote industrial development through diversification, regional value chain development, agricultural development, and food security.
- l Resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes.
Mervyn Naidoo, CEO of ACTOM, says, “The potential for growth and increased competitiveness across various sectors is undeniable, making AfCFTA a significant development for South Africa’s economy.”
ACTOM is well-known as a mover and shaker in manufacturing circles. It has a footprint across sub-Saharan Africa and has strategically established industrial hubs in East, South, and West Africa.
ACTOM’s industrial hubs are perfectly positioned to leverage significantly off the implementation of AfCFTA to drive local economic growth and create opportunities for businesses and individuals. These hubs are the heart of innovation, productivity, and collaboration, bringing together companies, entrepreneurs, and skilled workers to drive progress and success. With ACTOM’s business model and the transfer of their intellectual property, local communities can access state-of-the-art infrastructure, resources, and support systems that empower them to thrive and expand their operations. ACTOM is a beacon of inspiration for aspiring entrepreneurs and established companies by fostering a dynamic environment that encourages creativity and efficiency. “We embrace the economies of other countries by creating factories. We embrace the locals by employing them to work in the factories and manufacture products for their needs and those of neighbouring countries. In doing this, the people of Africa become economically active. They pay taxes, the company pays taxes, and the country’s people and the economy benefits—so it is a mutually beneficial model to create industrial hubs in East, South and West Africa,” said Naidoo.
Eastern Hub
With African countries trading freely under the AfCFTA, one of many success stories saw the strategic establishment of an industrial hub in Kenya in July 2023, providing a platform for the broader portfolio of ACTOM’s products and services. ACTOM Kenya, headed by General Manager Kelvin Ageng’o Oriwo, said, “Kenya is well positioned to offer goods and services to neighbouring countries like Tanzania, Uganda, Burundi, and Rwanda. Instead of importing products and services from South Africa, which can have logistical challenges, we use the Kenyan facility as the gateway to our neighbouring countries. We can deliver in a much shorter period than our South African busniess,” adding, “The AfCFTA presents significant opportunities for Kenya to expand its African export markets, contributing to GDP growth and sustainable economic development.”
ACTOM Kenya acquired a low-voltage panel building facility from Schneider Electric and is now expanding to a medium-voltage protection panel facility. According to Oriwo, they are planning to increase the facility to produce power solutions and transformers in the near future. With its 70 employees, Oriwo is eyeing a growth to 300 employees through expanding its operations.
Copperbelt Region - Zambia
The Copperbelt is a natural region in Central Africa, located on the border between northern Zambia and the southern Democratic Republic of Congo. It is known for its vast copper deposits and active copper mining industry.
Notably, one of ACTOM’s electro-mechanical divisions, Marthinusen & Coutts (M&C) took ownership of BPT in 2011 with a significant investment into the businesses. M&C services 10 African countries, offers full-on- and off-site electromechanical services and repairs on power generation equipment, medium and low-voltage AC and DC motors, transformers, and coil manufacture, as well as the full range of engineering, testing, diagnostics, balancing, and maintenance services. They employ 42 Zambians and 1 expat.
Over a period of four years, M&C Zambia successfully upgraded its test facilities, which accommodate both AC and DC motors. The facility also boasts a temperature-controlled burnout oven, curing ovens, and a vacuum pressure impregnation (VPI) tank. Furthermore, winding verification ensures that stators and rotors are wound to international and Original Equipment Manufacturer (OEM) specifications. Further upgrades have also been implemented to the mechanical repair shop, which offers machining, milling, and submerged arc welding.
M&C Zambia offers various sectors within Zambia an in-country repair solution where, in the past, repairs would have been sent to South Africa for repair, resulting in additional downtime and costs for the Zambian mines.
According to Eugene Lottering, General Manager of Marthinusen & Coutts Zambia, “One of the biggest Copper Mines in Africa and Globally, mentioned that if it were not for M&C Zambia’s repair shop, they would have had significant challenges operating their mines to full capacity.”
With the support of ACTOM, M&C Zambia empowers individuals to enhance their career prospects and helps businesses improve their productivity and competitiveness. By focusing on leadership development, technical skills, and industry-specific training, M&C Zambia addresses the skills gaps in the local workforce, making the economy more resilient and adaptable to changing market dynamics. “With continuous guidance from our team in South Africa in training our employees in Zambia, M&C Zambia’s skill set and experience were taken to a new level”, said Lottering.
Southwestern Hub
In collaboration with the Economic Commission for Africa (ECA) and the United Nations System in Namibia, the Namibian Government officially launched Namibia’s National Strategy and Implementation Plan for the AfCFTA period 2022-2027. The Agreement allows Namibia to increase its intra-African exports and enhance its export-led manufacturing and services capabilities. Following the expansion of the port at Walvis Bay, the country is positioning itself as a gateway to the more than 345 million people in the broader African market.
ACTOM Energy Namibia (AEN), located in Walvis Bay, forms one of ACTOM’s strategic platforms in servicing Namibia’s rich mining industry. Their core competencies include overhauling and repairing low-, medium-, and high-voltage electrical motors, generators, and other AC and DC rotating equipment. The AfCFTA presents a significant opportunity for AEN to expand its reach and impact on the continent. “We established our footprint in Namibia to offer our hands-on expertise to our clients by offering them turn-key solutions and services when required”, said Struan Steele, General Manager, ACTOM Energy Namibia. We offer a service platform to Namibia and its neighbouring countries, including Angola, Botswana and the Democratic Republic of Congo. We are actively training artisans and providing them with hands-on experience in the industry”, he added.
In 2023, AEN was awarded an R100 million contract to build a substation in Swakopmund for Namibia’s utility company, NamPower. This substation will be completed in early 2025, with most equipment supplied by group divisions and business units.
Adopting the AfCFTA marks a significant milestone in the economic development of the African continent. By promoting intra-regional trade and manufacturing activities, ACTOM has the potential to drive future growth and development in Africa. As countries work together to harness their collective strengths and resources, we can expect to see a rise in GDP, job creation, and overall prosperity for the people of Africa.
Clearly, the future of manufacturing in Africa is bright, and the possibilities for economic advancement are endless. With a focus on collaboration and innovation, ACTOM paves the way for a more integrated and competitive African market. As we look towards the future, let us seize this opportunity to unlock the full potential of our continent and create a more prosperous and sustainable future for all. The future of Africa is in our hands, and with ACTOM leading the way, we can build a brighter tomorrow for generations to come.