If sub-Saharan Africa can sustain its existing growth rates and take steps to get its manufacturing base right, it will have a real chance of becoming a global economic power

There are five countries in Africa right now – Ethiopia, Ghana, Tanzania, Zambia and Mozambique – that are creating some big ripples across the economic world. Each has experienced a decade of rapid and sustained growth and there are no signs of this trend waning.

The question is: can this growth be maintained to lift these regions into the middle income category and provide a beacon for all other countries in Africa?

By building a detailed economic profile of the major industries in these five countries, the International Growth Centre is gradually identifying their role in Africa’s economy. This is an essential starting point because the economies of sub-Saharan Africa are extremely poorly documented.

It is difficult for people – even in government – to get a clear and comprehensive account of the industries that are performing exceptionally well. We know a lot about certain firms but the knowledge tends to be patchy and unsystematic.

That has been the impetus for the four mapping enterprise volumes that we have produced at the Centre. To date, we have profiled the existing capabilities of the 50 major firms in Ethiopia, Ghana, Tanzania and Zambia. An enterprise map of Mozambique is in the planning stages.

The books are designed to provide governments, local firms and overseas companies with a detailed profile of the industries operating in each sub-Saharan country. We can then form realistic scenarios of the policy changes needed to capitalise on the growth that has occurred in the past decade.

If you look at the breakdown of contributors to growth in these economies over the past decade, agriculture has played a large role. Increases in international prices of raw materials have helped, but there has also been a doubling of real growth in their industrial sectors.

The snapshot picture of these economies shows there are excellent firms scattered across the spectrum, some of which are world class. The food and drink sector is well developed; the cement and building industries are also performing well. The gap is in middle ground manufacturing.

Africa needs to take the lead from countries such as South Korea and Ireland, which over the past 30 years have successfully targeted foreign direct investment to build their manufacturing base. The key lies with creating the right business environment for these companies.

Over the past two decades, the real attraction for foreign investors has been China and India and the money has subsequently flowed in that direction. However, there are some very good indicators that the tide is turning.

China’s textile industry is waning due to rising wages and firms are increasingly moving from Pakistan to India to achieve lower unit costs, facilitated by the rise of air freight in sub-Saharan Africa. Tanzania is also about to enjoy a boom with its offshore gas industry. A lot of multinational companies are starting to inject money into the economy.

There is definitely a new window of opportunity in sub-Saharan Africa and it’s an exciting time for the region.

That said, there are some major obstacles that need to be overcome. Business systems that work well with local industries don’t necessarily gel with big multinationals. Many of the existing practices need to be modernised and governments must take a pro-active approach to encourage foreign investors so they don’t face the same difficulties that domestic firms have learned to circumnavigate.

It is crucial that domestic companies are integrated into the supply chains of the big multinational firms if sub-Saharan Africa is to sustain the economic benefits long term.

The most notable scarcity in African counties is not entrepreneurship – which is abundant – but a cadre of middle managers with the market intelligence and ability to run mid-sized companies effectively.

Economic growth is the key to reducing poverty in Africa, yet high, sustained growth has remained elusive for many of its countries. The factors preventing this growth are usually context dependent, which makes detailed local knowledge so important – hence the mapping enterprise project.

Africa desperately needs more investment – and the opportunities are boundless. If we can identify the challenges and prospects for each industry, there is a good chance that sub-Saharan Africa can emerge as a global economic power in the decade ahead.

John Sutton is the Sir John Hicks professor of economics at the London School of Economics. He has been a visiting associate professor at Tokyo University, a Marvin Bower Fellow at Harvard Business School, and a visiting professor of economics at Harvard University and at the University of Chicago.