MMAKGOSHI LEKHETHE | Unlocking Africa’s future: the IDC’s commitment to growth

Africa stands at a pivotal moment in its economic history. Home to 18% of the world’s population, endowed with vast natural resources and powered by a youthful demographic, the continent holds immense promise. Yet it accounts for only about 3% of global trade and foreign direct investment (FDI).

This gap between potential and performance is not a measure of the continent’s capabilities but of unrealised opportunity. Closing it requires a bold, co-ordinated and inclusive approach to industrialisation.

The B20 trade and investment task force’s recommendation on a new trade and investment deal for Africa aligns closely with the Industrial Development Corporation (IDC) of South Africa’s continental strategy. It offers a blueprint for industrial transformation: strengthening African export competitiveness, promoting participation in the global market, and positioning the IDC to help drive the continent’s industrial future.

Africa’s participation in global value chains has been largely extractive — dominated by raw material exports, with limited value addition. This model has not delivered the structural transformation or job creation the continent needs. The IDC aims to change this by investing in regional ecosystems that span multiple African countries and focus on value-added manufacturing.

Important sectors include:

• Agriculture & agri-processing: oilseeds, poultry, maize, wheat and rice.
• Mineral beneficiation: lithium, cobalt, copper and graphite for battery and energy value chains.
• Capital equipment: mining machinery and equipment.
• Chemicals: fertilisers, biofuels and cosmetics.
• Automotive & NEVs: components, e-bikes and light commercial vehicles.
• Energy: natural gas, solar, wind and green hydrogen.

These sectors were identified through research and on-the-ground studies. They offer the greatest potential for job creation, export growth and regional integration.

The African Continental Free Trade Area (AfCFTA) is central to the IDC’s strategy. By harmonising trade regulations and enabling cross-border investment, AfCFTA provides the scale needed to develop competitive regional value chains. The IDC is actively investing in AfCFTA-aligned projects in Zambia, Mozambique, Kenya and Ghana, among others.

AfCFTA aims to increase Africa’s share of global manufactured value addition — from 2% to between 5% and 10% by 2030 — and to grow intra-African trade from 17% to 30%. These are ambitious targets, but they are achievable with co-ordinated action.

When it comes to mobilising investment and reducing risk, Africa needs to increase its annual FDI inflows from $52bn (about R892bn) in 2023 to $85bn-$110bn by 2030. The IDC is contributing to this goal by:

• Leveraging blended finance, guarantees and risk-sharing instruments;
• Partnering with multilateral development finance institutions and strategic equity partners; and
• Diversifying the corporation’s portfolio to unlock high-return opportunities while reducing exposure.

The IDC’s revised continental investment guidelines ensure environmental, social and governance compliance, and robust risk mitigation, making the corporation a trusted partner for investors seeking sustainable impact.

Interventions aim not to remove structural obstacles but to build robust, interconnected ecosystems that empower African businesses to thrive and integrate more meaningfully into regional and global value chains

Accelerating inclusive growth and industrialisation across the continent requires a deliberate, co-ordinated response to the systemic challenges that continue to impede progress.

Recent African Development Bank (AfDB) summits have reinforced this imperative through initiatives such as the “high fives” — five core operational considerations focused on:

• powering Africa;
• feeding Africa;
• industrialising Africa;
• integrating Africa; and
• improving the quality of life for all Africans.

Important areas identified for urgent action include:

• connecting 300-million Africans to electricity by 2030;
• financing climate-resilient infrastructure;
• bridging the digital divide through inclusive finance and digital transformation; and
• developing strategies to unlock the potential of the continent’s green mineral endowments.

From the IDC’s perspective, regional value chain development remains constrained by a range of entrenched barriers. These include:

• inadequate infrastructure;
• fragmented industrial ecosystems;
• weak backward and forward linkages; and
• complex border procedures that increase trade costs and delays.

Limited access to finance — particularly for pre-bankable projects and SMEs in underdeveloped regions — further stifles inclusive industrial growth.

In response, the IDC has developed a strategy anchored by five key pillars:

• Infrastructure investment: prioritising co-developed public-private partnership models to expand transmission grids, enhance regional logistics systems (including rail, ports and roads), and developing bulk water and energy infrastructure to unlock industrial zones.
• Value chain strengthening: focusing on SADC-linked sectors such as agriculture, mining, chemicals and manufacturing, with a strong emphasis on localisation and beneficiation to reduce import dependency and enhance regional competitiveness.
• Industry catalysation: supporting feasibility-stage projects and fostering strategic partnerships with governments and research institutions to stimulate the emergence of new industries.
• Policy and ecosystem enablement: shaping conducive regulatory environments and promoting cross-border harmonisation through structured public-private dialogue and regional co-operation.
• Inclusive financing models: expanding access to finance for entrepreneurs in rural and underdeveloped regions by leveraging blended finance and syndicated approaches to crowd in private capital.

These interventions aim not to remove structural obstacles but to build robust, interconnected ecosystems that empower African businesses to thrive and integrate more meaningfully into regional and global value chains.

The IDC is committed to converting identified value chain opportunities into a robust project pipeline. This requires:

• Scoping studies to assess market potential and competitiveness;
• Partnerships with stakeholders addressing co-ordination failures across supply chains; and
• A focus on value chains involving two to three countries, ensuring feasibility and impact.

We are also aligning the IDC’s industry plans — across poultry, sugar, automotive, steel, green hydrogen and renewable energy — with regional opportunities to maximise scale and sustainability.

Africa’s economic transformation is not a distant dream; it is an urgent imperative. Through strategic investment, stronger intra-Africa trade, deeper regional collaboration and industrial innovation, we can unlock the continent’s full potential.

• Lekhethe is CEO of the IDC and deputy chair of the B20 trade and investment task force