Chinese shoe maker Huajian has built a factory outside Adis Ababa, Ethiopia, employing some 550 local and Chinese workers. (CNN)
Opinion:
By Hinh T. Dinh, Special to CNN
Editor’s note: Hinh T. Dinh currently serves as a Lead Economist in the Office of the Senior Vice President and Chief Economist of the World Bank in Washington DC. He is the lead author of the “Light Manufacturing in Africa – Targeted Policies to Enhance Private Investment and Create Jobs” World Bank report.
Washington D.C. (CNN) — With domestic labor costs rising, many Asian manufacturing producers are now looking to relocate their factories in other regions of the world. Could Africa replace Asia and/or China as the world’s next manufacturing hub?
To be sure, Africa has a number of manufacturing advantages that it has yet to realize. Besides low labor costs and abundant resources, these include duty-free and quota-free access to U.S. and EU markets for light manufactures under the Africa Growth and Opportunity Act and the Cotonou Agreement.
Is this enough to offset Sub-Saharan Africa’s generally low labor productivity relative to that of its Asian competitors?
