This report explores how manufacturing investment can drive inclusive economic transformation across sub-Saharan Africa and how investors and development finance institutions can balance impact objectives with commercial outcomes. Produced by LSE Consulting’s Trade Policy Hub (TPH) in partnership with LSE Growth Lab and Firoz Lalji Institute for Africa, the study was commissioned as part of the Manufacturing Africa programme, funded by the UK International Development programme (UK aid).
Drawing on quantitative analysis of 262 manufacturing and agri-processing deals across six African markets, complemented by interviews with firms, investors and programme stakeholders, the report assesses Manufacturing Africa’s five strategic levers of transformation: Jobs & Livelihoods, Climate & Environment, Gender, Economic and Social Inclusion (GESI), Multiplier Effects, and Inclusive Economic Transformation (IET).
The findings show that ambitious, high-impact investments are not less likely to reach financial close, although they may take longer to do so. The research highlights the importance of maintaining a diversified portfolio and demonstrates that transformational outcomes can be achieved across sectors, geographies and deal sizes. It also finds that inclusion outcomes require deliberate attention, as gender and social inclusion do not automatically improve alongside other measures of economic transformation.
The report provides practical recommendations for investors and development finance institutions seeking to support sustainable industrial development, job creation, environmental sustainability and inclusive growth, while strengthening the long-term attractiveness of African manufacturing sectors to investment.