The ongoing US-China trade tensions are expected to fuel foreign investment inflows in Africa, particularly in the manufacturing and automotive sectors. The Pan-African Manufacturers Association (PAMA) predicts that Africa’s manufacturing sector will grow by 4% in 2025, driven by improving economic conditions and the potential spillover effect of the trade shift in the West towards Africa.
To attract foreign direct investments, PAMA advises African governments to:
- Strengthen Regional Integration: Improve trade collaboration among African countries and implement the Africa Continental Free Trade Act (AfCFTA)
- Address Non-Tariff Barriers: Improve customs procedures and harmonize trade regulations
- Boost Competitiveness: Provide incentives for manufacturers to invest in digital technologies, automation, and AI-driven production
- Invest in Infrastructure: Increase investment in cross-border infrastructure, such as roads, railways, and digital connectivity
- Create a Favorable Investment Climate: Improve ease of doing business, offer tax incentives, and provide guarantees against political risks
By implementing these strategies, African countries can capitalize on the US-China trade tensions and attract foreign investments to drive economic growth and development.
Source: Nairametrics
