There are huge opportunities for African countries to take advantage of outsourcing to other countries following China's economic success that has sent wages there soaring, says Neil Ford, writing in African Business. He says the best placed will be countries that can ensure sufficient water and power supplies, plus transport infrastructure.

He writes: "There is no doubt that China’s economic boom over the past 30 years has transformed the face of the international economy. A huge proportion of global manufacturing has transferred to the south and east of the country, triggering the biggest migration in human history.

"However, the country has become a victim of its own success. Manufacturing wages in the country have risen by an average of 14% a year over the past five years and now investors are looking to other lower cost centres. The international firms that had outsourced much of their manufacturing capacity to China – and Chinese companies – themselves are looking to cut costs."

The Chinese government is trying to rebalance the economy and moving away from low-cost manufacturing toward more killed production with increased use of robots and technology.

And that is where, Ford argues, Africa has huge potential: "Other Asian countries are currently benefitting, especially Vietnam, Bangladesh and, in the near future, Myanmar, but there is huge potential for African states to benefit too. The most obvious sectors are textile and clothing production, where wages account for a large proportion of total costs. With the most rapidly growing population of any region, Africa can provide the workforce.

"Manufacturing costs are not all about wage levels. The quality of infrastructure is also very important and this is what has let most of Africa down in the past. Power supplies need to be plentiful and reliable, while many producers also consume a lot of water."

He concludes that outside of South Africa, there is a limited tradition of mass manufacturing in Sub-Saharan Africa. Yet it is easy to forget that China too was a largely agricultural economy until just a generation ago. Sub-Saharan Africa can be transformed in just the same way.

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