Effect of Artificial Intelligence on Manufacturing and Industrialisation in Africa:Automation Disruption, Employment Threats, and Industrial Policy Responses
Automation Disruption, Employment Threats, and Industrial Policy Responses
Keywords:
artificial intelligence, manufacturing Africa, industrialisation, structural transformation, automation, employment disruption, industrial policy, technology transfer, reshoring, African Continental Free Trade AreaAbstract
This study examines the effect of artificial intelligence on manufacturing and industrialisation in Africa, focusing on how AI-driven automation is disrupting industrial employment, threatening the labour-intensive manufacturing pathway that historically enabled structural transformation in East Asia, and reshaping the industrial policy choices available to African economies. The study adopts a mixed-methods design combining systematic documentary analysis, comparative policy mapping, and secondary quantitative data from major international and regional institutions. Guided by Structural Transformation Theory and the Technology-Organisation-Environment Framework, the study identifies six major disruption domains: automation of labour-intensive tasks, concentration of productivity gains in foreign-owned firms, displacement of workers without adequate reskilling or protection, widening technology capability gaps, disruption of supply chains through AI-enabled reshoring and nearshoring, and the closure of Africa’s traditional industrialisation pathway.
Findings show that AI and automation contributed to a manufacturing employment decline of 6 to 19 percent across the formal sectors of the five focus countries between 2020 and 2023, while fewer than 8 percent of African manufacturing firms adopted AI-assisted production technologies. This creates what the study terms the African Manufacturing AI Paradox: AI is disrupting jobs before delivering broad productivity or capability gains. The study’s main contribution is to identify and theorise this paradox as a structural challenge to African industrialisation. It proposes a seven-Policy Priority industrial policy framework to govern AI adoption in ways that support employment, local capability development, and long-term industrial transformation.
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