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africa's sunrise industries are industries that have emerged in africa by leveraging the continent's existing factor endowments. these industries have catalytic potential and can promote the transformation of africa's production structure through their extensive forward and backward linkage effects and regional and sub-regional value chains.

at present, these industries have been identified as priority investment industries in the overall planning of african institutions such as the african union, the african development bank and the african continental free trade area secretariat. the special attention paid to these industries indicates that countries are further policy-oriented to encourage strategic investment, and will also promote the continuation of partnerships and the operation of investment projects. so, what is the potential of africa's sunrise industries?

agriculture and agro-industry

agriculture provides livelihoods for 70% of africa's population, and africa has 60% of the world's uncultivated arable land. despite its rich resource endowment, africa's export potential for major categories of agricultural raw materials and processed products is far from being effectively released.

agriculture can serve as a foundation for the development of manufacturing, and extensive forward and backward linkages in the value chain are crucial to the structural transformation of africa's economy. according to research by the african development bank, agro-processing has extensively stimulated auxiliary services and support activities in the secondary and tertiary industries. in addition, given that most agricultural products are large and perishable, processing plants are often located close to the source of raw materials. in this case, agro-processing can have significant spillover effects on local communities by purchasing direct materials from farms and providing employment opportunities in value-added production.

given the huge social and economic impact of agriculture and agro-processing, investing in this sector can significantly enhance the overall dynamism of the value chain, from promoting the wider use of inputs such as fertilizers, machinery and smart agricultural services upstream to improving storage facilities, local processing and developing diversified markets downstream.

automotive

africa is also expected to become a key region for promoting sustainable transportation, as it is rich in copper, cobalt, bauxite and lithium, which are essential raw materials for the production of electric vehicles. due to government incentives, rapid urbanization and infrastructure development, the output value of africa's automotive industry is expected to grow to us$42.06 billion by 2027.

it is worth noting that the african continental free trade area has boosted the development of the automotive industry by achieving economies of scale through market integration and reducing tariffs on inputs such as aluminum in mozambique, rubber in côte d'ivoire, and finished cars in south africa and morocco. equatorial guinea is a major oil producer in africa, which has traditionally relied on oil extraction to maintain its economy. it has the potential to diversify its economy and enhance its economic resilience by providing oil-based materials such as plastics and synthetic rubber, which are essential for automobile production, thereby creating higher added value.

the african continental free trade area's rules of origin establish a common threshold for the level of added value, promoting regional cohesion and competitiveness. the african association of automobile manufacturers (aaam) has proposed a "hub and spoke" model for the automotive industry chain, where the parts needed for finished product assembly in the "hub" economy are provided by the surrounding "spoke" economies, which can benefit multiple countries from the automotive industry and promote broader regional development. chinese investors can leverage basic materials such as steel, aluminum, leather, rubber, plastics and glass, as well as assembly sub-industries such as body welding, manufacturing, shearing, bending, stamping, and transmission systems to leverage africa's growing demand for automobiles and abundant raw materials, and help african countries build a strong supply chain.

pharmaceutical industry

at present, common diseases in africa are mainly non-communicable diseases such as diabetes, followed by infectious diseases such as malaria and hiv. according to research by the african development bank, the annual per capita medical expenditure in africa is us$25, far below the global average of us$160, and there is huge potential for growth. however, africa's current drug production accounts for only 3% of the world's total, and more than 80% of its drugs are imported. in africa, the establishment of pharmaceutical manufacturing centers in all regions can effectively promote the growth of the pharmaceutical industry and enhance the resilience of its health system. in the meantime, the private sector is particularly needed to participate in financing and research and development. at present, pharmaceutical manufacturing in africa is concentrated in only a few countries, and a wider distribution is needed to reduce infrastructure costs, encourage resource sharing and optimize logistics.

chinese investors can seize the opportunity to invest in the pharmaceutical industry to enhance local manufacturing capacity for medicines to prevent and treat the most common diseases in africa.

green manufacturing

environmental products play an important role in africa's efforts to protect the environment and mitigate climate change. however, africa's participation in the global environmental products market is still limited. according to a report released by the consultancy firm reimagined, in 2020, the total global trade in environmental products was us$29.9 billion, of which africa accounted for only 1%. within africa, the total trade in environmental products in 2020 was us$33.82 billion, of which imports accounted for 77.5% of the total trade.

low production and export volumes are far from the huge manufacturing potential of environmental products in africa. it is estimated that africa has an astonishing 10 terawatts of solar power alone, 350 gigawatts of hydropower potential, 110 gigawatts of wind power potential and 15 gigawatts of geothermal resources. in addition, the international renewable energy agency predicts that by 2030, africa's installed renewable energy capacity is expected to reach 310 gigawatts, making it the world's leading renewable energy production region.

as the global demand for environmental products continues to grow, african countries can use their rich resources, abundant labor force and strategic location to become major manufacturers of environmental products. and through cooperation with chinese manufacturing, african countries have the opportunity to increase their participation in the global environmental products market.

our reporter tang li