Morocco Dethrones South Africa as Africa's Top Industrial Economy

Morocco has overtaken South Africa as the continent's leading industrial economy, according to the Africa Industrialization Index 2025 (AII) released by the African Development Bank (AfDB) on the sidelines of its Annual Meetings in Brazzaville, Republic of the Congo, held from May 25 to 29.

The index, which evaluated industrial development across 54 African countries over the period from 2010 to 2024, placed Morocco at the top with a score of 0.8415 points against South Africa's 0.8396. The AfDB attributed the shift to Morocco's sustained industrial upgrading, export diversification, and consistent industrial policy over more than a decade. South Africa, the report noted, remains a continental manufacturing powerhouse but has seen its competitiveness decline steadily.

Released alongside the AII was the inaugural Africa Industrial Investment Barometer (AfIIB), developed by WITBA Invest SA in partnership with Trendeo. Together, the two reports paint a mixed picture of African industrialization. While 41 of the 54 countries evaluated improved their scores over the review period and overall continental performance advanced 6 percent, Africa still accounts for less than 2 percent of global manufacturing output and only 1.4 percent of global manufactured exports. Manufacturing value-added per capita has fallen below 2014 levels.

Central to Morocco's rise are its automotive and aerospace industries. Automotive exports reached $4.57 billion by the end of March 2026, driven by major manufacturing hubs in Tangier and Kenitra that have positioned the country as Africa's largest car producer. The aerospace sector generated export revenues of over $2.54 billion in 2024, with more than 150 companies operating in the country. Morocco is also pursuing plans to produce its first aircraft engine by 2027 or 2028. Incentives within special economic zones, including 0 percent corporate tax for the first five years and approximately 8 percent thereafter, along with duty-free equipment imports and subsidised land, have attracted sustained foreign investment.

North Africa as a whole captured 56 percent of cumulative continental industrial investment between 2020 and 2025, with Morocco and Egypt leading the region. Both the AII and the AfIIB identified intra-African trade as a persistent structural weakness, with trade between African countries representing only 14.4 percent of the continent's total trade volume. The reports called for deeper integration through functional economic corridors, quality infrastructure, and harmonised standards under the African Continental Free Trade Area (AfCFTA) framework.

The AfIIB also issued a warning on decarbonisation, noting that African industries must begin greening their processes to avoid structural penalties from carbon border adjustment mechanisms being rolled out by Europe and the United States. For Morocco, whose exporters already face live exposure to such mechanisms, the warning carries immediate relevance. East, West, and Central Africa, meanwhile, were identified as still lagging in industrial development and regional production linkages.