Working Backwards from Capital: What It Takes to Anchor Manufacturing Investment in Africa
Attracting manufacturing investment takes far more than a convincing pitch. Investors want to know whether the economics stack up and whether the operating environment will remain reliable long enough for them to recover their investment. Bridging this gap requires addressing the unvarnished, hard questions that shape commercial calculations behind closed doors.
Across Africa, governments are looking to manufacturing to create jobs, boost exports, and capture more value from local resources. Turning that ambition into an investible proposition is where execution gets tough.
I saw this first-hand while advising on initiatives to develop a competitive textiles and apparel industry across West Africa. The raw opportunity was compelling. The region produces around 60% of Africa’s cotton and had preferential access to major consumer markets through arrangements such as AGOA. At the same time, global brands were actively looking to diversify production beyond established Asian hubs amid trade tensions.
We took that opportunity to investors. But their questions quickly moved beyond the investment pitch while we were out on the roadshows:
- Can I move inputs and finished goods reliably?
- What will power cost, and can I depend on it?
- How productive is the available labour force?
- Can I source the inputs I need locally, or will I have to import them?
- For the inputs I have to import, how quickly can I get them through the ports?
- What policies affect the economics of operating here?
- How easily can I reach my customers?
- What happens to my investment if the political or regulatory environment changes?
These variables were the true determinants of whether we landed investments or not.
The competition is with established ecosystems
A country trying to attract manufacturing investment is rarely competing with an empty factory somewhere else. The real competition is with highly integrated, well-connected production ecosystems that already dominate global trade. In textiles and apparel, this means asking a manufacturer to consider West Africa alongside locations in Asia where suppliers, specialised skills, infrastructure and logistics networks have matured over decades. Emerging markets can offer distinct advantages like raw material proximity or tariff-free market access, but they also introduce operational friction.
The proposition therefore needs to work as a unified whole. A generous tax incentive does not compensate for unreliable grid power, and a modern industrial park loses its edge if imported inputs sit at the port for days or finished goods struggle to reach customers. This is why investment attraction cannot sit apart from the broader, systemic work of trade facilitation, industrial policy alignment and economic development.
Investors are usually not assessing an opportunity in isolation. They are deciding whether it is worth leaving what already works for them elsewhere.
Work backwards from the investor
One of the most impactful steps a government can take is to test its investment proposition with commercial capital early in the design phase.
Investor feedback can expose structural constraints that are less visible from inside a ministry. It can also distinguish between things that are desirable and those that materially affect an investment decision.
This commercial reality check forces stakeholders to look critically at the performance of a trade corridor, address policies that unintentionally inflate production costs, or re-sequence an ambitious roadmap because foundational conditions are not yet in place.
Working backwards from the investor does not mean giving away too much to secure the investment. Governments must also guard against regulatory capture, particularly where incentives designed to attract investors risk undermining longer-term economic value or disadvantaging domestic businesses. The aim is a proposition that works commercially for the investor while creating lasting value for the country.
The objective is not to eliminate every constraint before approaching the market. Few markets can offer that. The goal is to identify which constraints matter most, determine what can realistically be fixed, and ensure remaining risks are honestly reflected in the incentive proposition.
This predictability is critical for projects with long payback periods, as investors are making a judgement about whether the environment will remain sufficiently predictable over the life of their investment. That brings political and regulatory credibility straight into the commercial calculation.
Preparation dictates roadshow success
Investment roadshows, brochures, and ministerial meetings have their place. But by the time a country begins selling an opportunity, the structural work that dictates its credibility and operational speed must already be underway.
The strongest pitches connect a government’s industrial ambitions directly to the practical operational conditions required to make a business profitable.
Often, that work takes you far from the factory floor. It leads you to a port bottleneck, a border crossing, a utility pricing model, or a targeted workforce training program. Addressing these systemic gaps is what ultimately closes sustainable investment deals.
Ports and trade corridors come up in almost every one of these conversations — investors size up a country's manufacturing potential in part by how reliably goods move in and out of it. Our next Field Note goes deeper into that specific bottleneck: why efficient terminals alone don't fix a trade corridor, and what it actually takes to reform one.