Aggressive state-backed industrial policies, growing manufacturing exports, large-scale infrastructure investment and strong economic diversification have led Morocco to become Africa's leading industrial economy, overtaking South Africa for the first time in 15 years.
According to the African Development Bank (AfDB)'s 2025 Africa Industrialization Index (AII), Morocco emerged as the continent's top industrialized economy in 2024, overtaking South Africa, whose industrial competitiveness has steadily weakened over the past decade.
AfDB report, which assesses industrial performance Using 19 Indicators From manufacturing capacity and export diversification to governance and labor conditions, Morocco's rise reflects “sustained industrial upgrading, export diversification and effective implementation of strategic industrial policies”.
“Morocco overtook South Africa to become the highest-ranked industrialized economy in Africa during the coverage period,” the report said.
Morocco's industrial transformation
Morocco's industrial development has taken more than two decades.
Since launching its industrial emergence strategy in 2005 north african nation Has adopted an export-led manufacturing model aimed at positioning the state as a gateway between Europe, Africa and the Middle East.
According to The Africa Report, Morocco's regional strategies have helped create globally competitive industries that now drive most of the country's industrial output. Over the past 20 years, aerospace has emerged as a key pillar of the state's industrialization plans, attracting more than 150 companies including Boeing, Airbus, Safran and Thales.
The country's industrial sector now contributes more than a quarter to GDP, one of the highest manufacturing shares on the continent, while Morocco's broader economy – estimated at around $200 billion – has maintained relatively stable GDP growth of between 3 and 4 percent over the past decade despite global economic shocks.
According to The North Africa Journal, an English-language publication focused on North Africa, the rise of the Arab nation follows more than 15 years of industrial policy supported by massive public investment and the expansion of economic engagement across Africa.
Long associated with phosphates and agriculture, Morocco has expanded into high-value industries including automotive manufacturing, aerospace, electronics and renewable energy.
The automotive sector has become the country's largest export industry. According to industry data, about one million vehicles are expected to be produced in 2025, while 535,000 will be produced in 2023 and 465,000 in 2022. Automotive exports to the EU are set to reach €15.1 billion in 2023, putting Morocco ahead of China and Japan in export value for some vehicle categories.
Global manufacturers including Renault and Stellantis have expanded production in Morocco, supported by industrial zones around Tangier and Kenitra.
The aerospace industry has also become a major pillar of industrial growth, generating more than $2.5 billion in export revenues by 2024. More than 150 companies now operate in Casablanca, Tangier and Nousseur, reinforcing Morocco's ambition to become a regional industrial and logistics hub.
Infrastructure promotes industrial growth
Morocco's industrial expansion has been based on infrastructure investment on a large scale unmatched in much of Africa.
Major projects include the Al Bourak high-speed rail line linking Tangier and Casablanca, the expansion of the Tangier Med port, the Nador West Med complex, the planning of the Atlantic port of Dakhla and the continued expansion of Casablanca's Mohammed V Airport.
Tanger Med has become one of Africa's largest and most efficient ports, helping Morocco strengthen supply chains and improve export competitiveness in Europe and global markets.
The country has also invested aggressively in renewable energy, particularly solar and wind power, in efforts to lower industrial energy costs and reduce reliance on imported fuels.
Morocco's updated Investment Charter, which came into force in 2023, further strengthened investor confidence through expanded tax incentives, simplified administrative procedures and stronger support mechanisms for foreign investors.
South Africa's industrial decline
While South Africa remains one of Africa's largest manufacturing economies, the country's industrial competitiveness has continued to weaken.
Under the updated AfDB index, Morocco's score increased from 0.8333 in 2023 to 0.8415 in 2024, while South Africa slipped marginally to 0.8396 from 0.8401. It is the first time since 2010 that Africa's largest economy has failed to top the continental rankings.
The report said the country “continues to experience a gradual decline in industrial competitiveness.” Analysts say the main reason for the decline is the collapse of the state infrastructure monopolies, Eskom and Transnet.
Persistent power shortages have driven up manufacturing costs as companies increasingly rely on costly self-production. At the same time, the deterioration of rail infrastructure and congestion at the ports of Durban and Cape Town have disrupted logistics and weakened export efficiency.
South Africa's economy has also remained largely stable, with average annual GDP growth of about 1 percent over the past decade.
“The real deficit of the continent is no longer the absence of industrial strategies,” Harouna Kaboré, president of Vitba Invest and a contributor to the AfDB report, told The Africa Report. “There is still a lack of rigor in implementation.”
Business leaders increasingly warned that investment capital could shift away from South Africa to rapidly growing industrial centres.
“The world competes for capital,” said Sim Tshabalala, CEO of Standard Bank. “If countries reduce investment risks and generate strong returns, capital will flow there rather than to South Africa.”
Uneven industrialization across Africa
The AfDB report states that industrialization progress across Africa is measurable but uneven.
Of the 54 African countries, 41 improved their industrialization scores in 2024, although only 24 improved their continental rankings.
North African economies continue to dominate the upper echelons of industrial growth, with Morocco, Egypt and Tunisia outperforming most sub-Saharan peers. South Africa remains the only sub-Saharan economy consistently competing at that level.
In West Africa, Senegal, Côte d'Ivoire, Nigeria and Ghana are among the region's most advanced industrialized economies, while Kenya, Uganda and Tanzania lead East Africa.
Morocco's rise is being seen as evidence that long-term industrial policy, infrastructure development and export-oriented manufacturing can significantly reshape Africa's economic competitiveness.
