Investigating what the flow of manufacturing jobs means for Africa, with the World Economic Forum

Next week, global leaders will gather at the World Economic Forum annual meeting in Davos with a mission to “improve the state of the world.” But, as you might suspect, improving the world is not a one-week task. While most people have heard of the annual meeting in Davos, fewer know about the Forum’s ongoing work.

A pillar of ongoing activity is the network of Global Agenda Councils (GACs). Over 1,500 development experts from academia, business, government, and NGOs belong to a total of 80 GACs that focus on issues from organized crime to ocean conservation.

World Economic Forum Annual Meeting at Davos

Africa and Manufacturing are on the agenda at next week’s World Economic Forum annual meeting in Davos.

Dalberg partner Edwin Macharia is one of 16 members of the Global Agenda Council on Africa. African Development Bank President Donald Kaberuka chairs the GAC, which includes a diverse group of actors such as Carlos Lopes, Executive Secretary of UNECA, Omobola Johnson, Nigeria’s Minister of Communication Technology, Ashish Thakkar of Mara Group, Jamie Drummond, the co-founder of ONE, and Zhong Jianhua, African affairs specialist in China’s Ministry of Foreign Affairs. The Council identified key issues affecting the continent, and then asked members to lead in shaping the global conversation around the specific topic areas.

Edwin was asked to lead an examination of the China-Africa engagement. Inspired by a provocative working paper from Chinese World Bank economist Justin Yifu Lin, the China-Africa initiative is exploring the global migration of manufacturing jobs and how Africa could maximize its benefit from these trends. Edwin presented the findings of the inquiry at the Summit on the Global Agenda in November of 2013. “At status quo, the shift of jobs from China to Africa is likely to be small and opportunistic in the near term, with African countries facing steep competition from East Asian countries for manufacturing jobs that might leave China,” he said.

Edwin Macharia

Dalberg partner Edwin Macharia

Edwin added that China is likely to be protective of the jobs, and might push to move their own manufacturing hubs from higher cost coastal areas to cheaper inland locations. As a result, African countries will need to more deliberately put jobs at the center of their engagement with China, embed local production agreements in business negotiations, and court manufacturing companies to set up shop locally. The most appropriate companies will be those that take advantage of natural resources or produce items Africans already consume. This growth could kick start clusters of production that will accelerate the industrialization of African economies.

The Forum will continue to address these topics during next week’s annual meeting. Sessions on Africa top the agenda this year, including “New Investment Trends in Africa” and “Africa’s Next Billion,” a discussion of how Africa can ensure its rapid growth is sustainable and inclusive. These and panels like “The New Manufacturing Context” overlap with the GAC on Africa’s efforts to support the continent’s transition from a place in need of aid to a place of growth and prosperity.

Edwin sees his work at Dalberg and the GAC on Africa as highly complementary. Says Edwin, “The greatest strength Dalberg brings to clients is a deep understanding of emerging markets that helps us translate ideas and research into opportunities to transform communities and countries. The GACs, and WEF more broadly, are unique platforms for engaging global leaders on critical questions that lead to action.”

For more information about Dalberg’s involvement in the World Economic Forum, see Robin Miller at the Forum’s “Top Trends in East Africa” debate on CNBC Africa, or this post on Dalberg’s role at the World Economic Forum in Africa. Dalberg Global Managing Partner James Mwangi is a Young Global Leader of the World Economic Forum.

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3 Responses to Investigating what the flow of manufacturing jobs means for Africa, with the World Economic Forum

  1. Vince Buscarello says:

    Interesting stuff, wish I could be there. Has Edwin commented on what dynamics are at work here outside of wages? Moving Chinese jobs to Africa simply because of wage costs sounds like a loose-loose scenario for most involved. In the long term, assuming China wants to keep growing it’s middle class through moderate wage growth, what are the real opportunities for African workers here?

    Also, I would be really interested to know what other industries (besides natural resource extraction) are emerging in different parts of Africa. Who is diversifying and how?

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