After holding the top spot for 15 years, South Africa has relinquished its title as the continent’s industrial champion. According to the latest Africa Industrialisation Index produced by the African Development Bank (AfDB), Morocco heads the rankings. “This reversal reflects South Africa’s gradual decline across all key performance indicators, while Morocco is reaping the rewards of its consistent and sustained progress,” the financial institution said.

Also making up the continental top 10: Egypt, Tunisia, Mauritius, Algeria, Eswatini, Senegal, Namibia and Côte d’Ivoire. “The 2025 edition confirms that Africa has achieved measurable, but uneven, progress on industrialisation,” the report states, adding that 41 of the 54 African countries have improved their industrialisation scores.

Twenty years of industrial strategies

While South Africa “continues to experience a gradual decline in its industrial competitiveness”, Morocco is reaping the rewards of the “sustained modernisation of its productive system, diversification of its exports and the effective implementation of its industrial policy”.

The sectoral strategies Morocco launched in 2005 have given rise to several industries that drive the country’s industrial output. Over the past 20 years, the aeronautics sector has become a pillar of the industrial emergence plan and industrial recovery plan, making the kingdom the continent’s leading destination through the establishment of more than 150 companies, including the giants Boeing, Airbus, Safran and Thales.

In 2024, the sector accounted for Dhs26.4bn ($2.87bn) in exports, compared with just Dhs7.7bn a decade earlier.

An automotive strategy that is paying off

South Africa, governed by Cyril Ramaphosa, also lost its title of leading car producer to Morocco in recent years. “Morocco’s passenger car output – 493,004 units in 2025 – has surpassed that of South Africa [329,600 units], confirming its continental dominance in this segment since 2019,” a report by the National Association of Automobile Manufacturers of South Africa (NAAMSA) details.

The automotive industry is Morocco’s leading export sector with a turnover of nearly €19bn ($22.1bn), employing approximately 250,000 people.

While it is beginning to pay off, Morocco’s industrial strategy faces difficulties in that it has not succeeded in “bringing about a change in the economic structure”, as the royal commission on the new development model stated in a report submitted to King Mohammed VI.

“Morocco has equipped itself with proactive sectoral strategies whose implementation has yielded encouraging results in some sectors and below-target results in others, partly due to management conducted in silos with limited synergies and insufficient coordination between sectors,” said the commission then led by Chakib Benmoussa, now the head of the Haut-Commissariat au Plan.

Eskom and Transnet, at the heart of decline

On the South African side, the industrial decline centres on the dual collapse of its state monopolies, Eskom and Transnet. Heavy industry requires a reliable power supply and efficient transport corridors.

What is still lacking is rigour in implementation

South Africa has lost both advantages simultaneously, even though progress has been made towards reversing the trend through Operation Vulindlela, a joint initiative of the South African presidency and the National Treasury aimed at accelerating structural economic reforms and removing obstacles to growth.

Repeated power cuts have forced capital-intensive industries to resort to costly self-generation, imposing a permanent levy on manufacturing. At the same time, the collapse of Transnet’s rail networks has transferred freight to roads, creating serious bottlenecks at the ports of Durban and Cape Town. South African manufacturers have had to maintain costly excess inventory to compensate for unpredictable delivery times.

On a continent that still accounts for less than 2% of global manufacturing output, South Africa’s decline is an unambiguous warning.

“The continent’s real deficit is no longer an absence of industrial strategies,” says Harouna Kaboré, president of Witba Invest, who contributed to drafting the AfDB’s report. “What is still lacking is rigour in implementation.”