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Research: Flying Geese in African Industry

Flying geese in African IndustrIES

With a grant from the Centre for Economic Policy Research, through the Project on Private Enterprise Development in Low-Income Countries (PEDL), CARI investigated Chinese and Asian investment in manufacturing in Africa, exploring the potential for catalytic engagement with African firms.

Researchers have completed a scoping study in Ethiopia’s leather sector and textile sectors, and three additional studies in Ghana, Nigeria, and Tanzania. They also added a technology transfer module to the Ethiopian manufacturing sector annual survey. The data from these studies continues to be analyzed and working papers are in preparation.  

The scoping study component of this research is the first project to focus solely on Chinese manufacturing investment in Africa. We interviewed nearly 90 Chinese firms across the four countries, some with multiple factory investments in entry-level manufacturing and agro-processing in the four countries. These firms had hired over 20,000 African workers and also employed over 1300 Chinese staff. A significant percentage (at least 28%) of Chinese firms had original come to Africa as traders and later decided to invest in production. We also interviewed a small number of African firms that had “technical partnerships” with Chinese companies that supplied expertise and temporary technical assistance on a contract basis. A large majority of firms sold their output primarily in local markets. Yet Chinese factories in our survey stated that their main competitors were other foreign firms in Africa or imports, not local African firms. 

Outputs from this project include:

“Flying Geese in Ethiopia’s Leather Cluster? Understanding Asian/Chinese Impact,” PEDL Research Note-ERG project 106, 2014. 

Yunnan Chen, Irene Yuan Sun, Rex Uzonna Ukaejiofo, Tang Xiaoyang, and Deborah Brautigam. "Learning from China? Manufacturing Investment and Technology Transfer in Nigeria,” SAIS-CARI Working Paper 02/January 2016.