Will Africa become a new global center for industrial manufacturing in the future?

Nigeria’s industrial foundation is weak, and various basic industrial goods required for industrialization are severely scarce—forcing private capital to shoulder the task of industrialization. Though framed as a ‘task,’ it is in fact a business opportunity: the lack of domestic supply creates relatively high profit margins in the local market. Dangote Group began with cement manufacturing and, after achieving an annual output of several tens of millions of tons across West Africa, moved into oil refining. Its refinery in Lagos has a daily capacity of 650,000 barrels and is preparing to expand to 1.4 million barrels per day. Meanwhile, Dangote Group has also launched a refinery project in Kenya (East Africa), with a total investment of $15 billion and a planned daily capacity of 700,000 barrels. Upon completion of both new projects, Dangote Group’s total daily refining capacity will reach 2.1 million barrels. To put this in perspective: China’s annual refining output in 1990 was 100 million tons—roughly equivalent to 2 million barrels per day—comparable to Dangote Group’s post-expansion capacity. If we include other refineries operated by sub-Saharan African enterprises, the continent’s total refining capacity will approach China’s level around the year 2000. Beyond refining, Dangote’s fertilizer investments are equally ambitious: its current urea production capacity in Nigeria stands at 3 million tons annually, and expansion plans for Nigeria and Ethiopia aim to raise output to 12 million tons per year—rapidly approaching China’s early-1990s level. Dangote’s ambitions extend further still. In a recent interview, he announced plans to invest at least $10 billion in new power plants across Africa, totaling 20,000 MW of generating capacity. He had also intended to build a steel mill with an annual capacity of 5 million tons—but postponed that plan, opting instead to prioritize the electricity market. Thanks to the success of its mega-refinery projects, Dangote Group has earned strong investor confidence; financing has become comparatively easy, and the company recently completed a successful listing. In a country where basic industrial goods are acutely scarce, Dangote’s success may appear accidental—but it is in fact inevitable, driven by overwhelming market demand. Should he realize his full vision, he may well be hailed as the ‘Father of African Industrialization.’ Dangote is merely the most prominent representative of Africa’s emerging large-scale capital. Others include Devki Group in East Africa. This group operates a 500,000-ton-per-year steel plant in Kenya and has recently broken ground on a 1-million-ton-per-year steel plant in Uganda, scheduled to reach full capacity by end-2027. Similar indigenous African capital is emerging en masse across other sectors—including cement, food processing, and automobile assembly.

The Ambition of Africa’s Richest Man

02 Chinese Capital Accelerates Steel Investments in Africa Africa’s steel industry stands at a turning point. According to data from the World Steel Association, Africa’s crude steel output in January 2026 stood at 2 million tons—a 5.8% year-on-year increase—and one of the few regions globally posting growth. Yet Africa’s per capita steel consumption remains only about one-eighth of the global average. A pronounced mismatch exists between Africa’s abundant resources and its underdeveloped industry. Guinea’s Simandou iron ore deposit is slated to produce 120 million tons annually of high-grade iron ore (65% iron content). By the early 2030s, Africa’s annual iron ore output is projected to exceed 200 million tons. Yet continental steel production has grown only slowly—from roughly 15 million tons in 2014 to just 26 million tons in 2024—with most output derived from scrap recycling rather than integrated smelting using locally mined ore. The World Economic Forum notes that scrap supplies are tightening globally. Without establishing an ore-based steel industry, Africa will remain dependent on imported steel—effectively importing back processed versions of its own exported iron ore. Yet Africa possesses abundant high-grade iron ore, natural gas, and vast potential for renewable energy—providing solid foundational conditions for steel development. China’s involvement across Africa’s steel value chain is now comprehensive, unfolding across three interlinked dimensions: resources, production capacity, and infrastructure. Resource front: In January 2026, China Baowu Steel Group announced receipt of the first shipment of iron ore from the Simandou project in Guinea—arriving at a Chinese port after a 46-day voyage. Jointly invested in by Baowu, Rio Tinto, and Chinalco, the Simandou mine represents a critical step in China’s strategy to diversify iron ore supply. Tsingshan Holding Group also signed a memorandum of understanding with Madagascar in early 2026 to develop a large-scale industrial park integrating mining, processing, and value-added transformation. Production capacity front: Nigeria is advancing a $2 billion Sino-African cooperative initiative to revive the long-idle Ajaokuta Steel Plant—shut down for 42 years. Originally built in 1984 with a designed capacity of 1.3 million tons per year, the plant has never operated normally. Under the new plan, Chinese investors will fund repairs and expansion, targeting an upgraded capacity of 10 million tons per year. Infrastructure front: The Ajaokuta project includes complementary upgrades to railways and port dredging, aiming to build a complete steel logistics ecosystem. Nigeria’s stated goal is clear: “We must stop exporting raw materials—adding value is essential to achieving industrialization.” 03 A Transformation Reshaping China–Africa Relations Dangote’s entry into steel production takes on layered significance when viewed against the backdrop of Africa’s industrialization drive and deepening Chinese engagement. Filling an industrial gap: As West Africa’s largest economy, Nigeria suffers from a weak steel base—importing around 10 million tons annually while producing only ~1.2 million tons domestically. Dangote’s move could supply foundational raw materials for infrastructure development and significantly reduce reliance on imported steel—truly laying the groundwork for industrialization. Generating massive employment: Dangote’s refinery alone employs approximately 30,000 people—80% of them Nigerians. With expansions underway in steel, power generation, and port operations, the group’s total workforce is expected to grow to roughly 65,000. The World Bank estimates Nigeria will need to create 40–50 million jobs by 2030; Dangote’s initiatives represent a vital contribution toward meeting that target.

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