Morocco overtakes South Africa industrial leader
Analysis based on 10 articles · First reported May 26, 2026 · Last updated May 27, 2026
The reports from the African Development Bank highlight a significant shift in Africa's industrial landscape, with Morocco emerging as the leading industrial economy. This could attract increased foreign direct investment to Morocco, boosting its economic growth and potentially impacting the stock performance of companies operating there. Conversely, South Africa's declining competitiveness may lead to a re-evaluation of investment strategies in that nation.
The African Development Bank (AfDB) released its 2025 Africa Industrialisation Index (AII) and the inaugural Africa Industrial Investment Barometer (AfIIB) during its annual meetings in Brazzaville. These reports indicate that Morocco has surpassed South Africa to become Africa's leading industrial economy, attributed to Morocco's sustained industrial upgrading, export diversification, and robust industrial policies. While South Africa remains a major industrial powerhouse, its competitiveness has declined. The reports also highlight that North and Southern Africa dominate industrial output and export sophistication, with Morocco and Egypt leading in attracting investment. A key finding is the low intra-African trade, reflecting fragmented industrial ecosystems, and a call for stronger regional integration through the African Continental Free Trade Area. Additionally, African industries are urged to accelerate decarbonization efforts to avoid penalties from carbon border adjustment mechanisms from Europe and the United States.
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