A bustling packing facility in Agadir, Morocco where workers are preparing tomatoes, mostly for international export.
Clea Rekhau, for The Washington Post via Getty Images
Morocco overtook South Africa as the continent's most industrialized economy last year as it upgraded its offering, diversified exports and implemented development policies, a report showed.
“Although South Africa remains a continental industrial superpower, it is experiencing a persistent decline in industrial competitiveness,” the African Development Bank said in its Africa Industrialization Index for 2025.
Years of power shortages, state corruption, political uncertainty and rising costs of living have hindered investment and curbed economic growth, with GDP growing an average of less than 1% annually over the past decade.
President Cyril Ramaphosa previously estimated that South Africa needs R1.6 trillion in public sector infrastructure investment and an additional R3.2 trillion from the private sector to achieve its infrastructure targets by 2030.
Gross fixed capital formation declined in three out of four quarters last year, rising only in the final four months of 2025, a sign that businesses are starting to invest in machinery and buildings, which can help boost the economy's productive capacity.
AfDB said industrial capacity is heavily concentrated in North and Southern Africa, which account for most manufacturing output, export sophistication and industrial competitiveness.
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