Africa to become world's manufacturing hub through China cooperation

JOHANNESBURG - The chief of the African Development Bank (AfDB) Donald Kaberuka says time has come for Africa to become the world's manufacturing hub and this can be done through industrial cooperation with China as the Asian giant phrases out labor-intensive industries.

"The global manufacturing cycle started from Europe then to America, before moving to South East Asia and China. It is now coming to Africa," Kaberuka told Xinhua Monday on the sidelines of the African Union (AU) summit held in Johannesburg, South Africa.

Kaberuka, who is to retire from the helm of the AfDB this August after serving two consecutive five-year terms, quoted a Chinese metaphor "building the nest to attract birds" to urge the African countries to put in place proper infrastructure and enabling policies to facilitate the transfer of manufacturing industries from China.

"This is the time for Africa to build the nest, the birds are waiting to come and breed," he said.

He said low labor costs and an integrated, larger market through the creation of the Tripartite Free Trade Area (TFTA) would help Africa attract foreign investment to the manufacturing sector.

However, the regional bank chief stressed the need for the continent to put in place an enabling environment for investors to come in, such as adequate power and transport infrastructure.

He said Africa needed to address factors undermining its foreign investment attraction capacity such as the high cost of doing business mainly due to insufficient energy supplies and a weak regulatory environment.

The continent also needed to address the capacity of its maritime ports to ensure fast clearance of goods, he said.

"Sometimes boats bringing materials have to wait for a week or two weeks before discharging cargo. So old infrastructure is a limiting factor but of these, energy is the biggest limiting factor," he said.

China built up its export-oriented economy based on proliferation of low-cost, labor-intensive factories over the past three decades. But this edge of low-cost is being eroded by the gradual rise of workers' income and benefits as the economy continues to develop. Over-capacity at home in sectors like steel, cement, textile, and solar panel manufacture pushed Chinese companies to seek better business opportunities abroad.