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AFC seeks optimization for manufacturing as Covid-19 widens opportunities

As Africa moves to accelerate its recovery post-COVID-19, it has become crucial to optimize its manufacturing sector and local value chain structure to achieve economic growth.

The need for this, according to the Africa Finance Corporation (AFC), was prompted by the cut in supply globally which caused the scarcity of raw materials and affected production activities of local manufacturing firms.

The AFC in a public statement advised that the situation presented an opportunity for Africa to develop its local manufacturing capacity, using innovation and industrialization which would also help to drive progress.

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As a solution, the AFC is looking to expand across West African countries, its ARISE Integrated Industrial Platform (AIIP), a tested and trusted model for industrializing Africa. Co-owned by Olam International, the AIIP model seeks to develop end-to-end, the value chain around a particular country’s natural resource.

The pilot project in Gabon was successful, through the establishment of a US$1bn wood-based export industry, which recorded major achievements like the Contribution of $842million to Gabon’s GDP and the Creation of 8,200 direct and 26,000 indirect jobs.

It also attracted 107 industrial, commercial, and residential investors that have collectively invested $1.7 billion into the non-oil economy, while generating $1 billion of wood product exports in 2019 compared to US$350 million in 2010.

As a result, Gabon has become the second-highest exporter of sawn wood in Africa and the tenth globally and a leading player in furniture manufacturing and export in Africa.

This was achieved through a supply chain joining sustainable forestry with furniture manufacturing and spin-off activities in a 37-hectare furniture manufacturing cluster, as well as an end-to-end logistical hub for manufacturers, with power, water, and other critical shared infrastructure.

Furthermore, it provided transport logistics through the upgrade of the trans-Gabonais rail network and construction of a general cargo port for export for moving the timber from the forest to the economic zone, as well as the finished product from the zone to the port.

“Given its success in diversifying Gabon’s economy, the Gabon model is now being extended to other West African countries, initially to Benin and Togo, and thereafter Cote d’Ivoire and others seeking to leverage individual countries’ unique resource advantage as the basis for the roll-out of their respective ecosystems,” it said.

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