Morocco overtook South Africa as the continent’s most industrialised economy last year as it upgrades its offering, diversifies exports and implements growth policies, a report showed.
“While South Africa remains a continental industrial powerhouse, it continues to experience a steady decline in industrial competitiveness,” the African Development Bank said in its Africa Industrialisation Index for 2025.
Years of power shortages, state corruption, political uncertainty and surging living costs have deterred investment and curbed economic growth, with gross domestic product expanding by an average of less than 1% annually over the past decade.
President Cyril Ramaphosa has previously estimated that South Africa needs as much as R1.6 trillion in public-sector infrastructure investment and an additional R3.2 trillion from the private sector to achieve its infrastructure goals by 2030.
Gross fixed-capital formation contracted in three of four quarters last year, rising only in the final four months of 2025 in a sign that businesses are beginning to invest in machinery and buildings, which may help lift the economy’s productive capacity.
Industrial capacity remains heavily concentrated in northern and southern Africa, which account for most of the manufacturing output, export sophistication, and industrial competitiveness, the AfDB said.
