Propensity to invest in manufacturing industry in developing countries: a literature review focused on the African case

It is known that industrial sector development leads countries to a structural change, promoting job creation, economic growth, and poverty alleviation. In Africa, a structural transformation is underway, but with a speed and a path divergent from industrialized countries and contemporary East Asia. Indeed, African countries are experiencing deindustrialization, and the manufacturing sector is still playing a marginal role in their economies. It is worth noticing that Africa global manufacturing share is smaller than in 1980, and the manufacturing share in Gross Domestic Product (GDP) is less than half of the average for all developing countries. The different industrial development between Africa and other countries is due to different background impacts, such as different technological contexts, a changing global marketplace, and natural resource availability. Despite this evidence, the manufacturing sector potential is also hindered by numerous obstacles. The major purpose of this paper is to provide a comprehensive literature review on the most significant constraints which have discouraged manufacturing settlements in developing African countries. This study can be valuable to expand a framework on the main country constraints, guiding and supporting manufacturing companies in choosing the proper territory to develop their industrial settlement. Support this process is a crucial step that can considerably reduce investment risk and boost opportunities. The analysis reveals that there are mixed factors that obstacle industrial growth, but a lot of evidence suggests that lack of infrastructure, adverse investment climate, skills gap, and political instability are the ones that negatively contribute the most