The African Continental Free Trade Area presents a major opportunity to boost Africa’s manufacturing, jobs and integration. However, experts say industrialisation requires infrastructure, strong institutions and policy consistency, lessons highlighted by China’s Shenzhen transformation, writes DAMILOLA AINA
Africa’s ambition to transform the AfCFTA into a vehicle for industrial growth may ultimately depend on whether governments can replicate one of the most important lessons from China’s economic rise: infrastructure must come before incentives.
As countries across the continent establish Special Economic Zones to position themselves for AfCFTA opportunities, historical evidence has warned that tax waivers and policy declarations alone will not deliver industrialisation unless they are backed by infrastructure: reliable electricity, efficient transport systems, modern ports and coordinated long-term planning.
Shenzhen’s transformation story
When former Chinese leader Deng Xiaoping designated Shenzhen a Special Economic Zone in 1980, few imagined that the sleepy fishing settlement bordering Hong Kong would become one of the world’s leading manufacturing and technology hubs.
At the time, Shenzhen was home to an estimated 30,000 residents. China remained largely agrarian, economically isolated and constrained by the rigid state-controlled policies of the Mao Zedong era. Foreign investment was rare, industrial activity was limited and international trade was tightly controlled.
Experimenting with reform
Yet Deng and other reform-minded leaders concluded that economic openness, foreign investment and export-oriented industrialisation offered the fastest route to lifting millions out of poverty and rebuilding the Chinese economy.
Rather than opening the entire country to market reforms at once, Beijing adopted a cautious approach. Between 1980 and 1981, it established four Special Economic Zones – Shenzhen, Zhuhai, Shantou and Xiamen – as controlled environments where new economic policies could be tested before wider implementation.
The zones became laboratories for reform, allowing China to experiment with private enterprise, foreign investment and export-led manufacturing while maintaining strong state oversight.
Building industrial ecosystems
More than four decades later, Shenzhen stands as one of the clearest examples of successful infrastructure-led industrialisation. With a population exceeding 17 million people, hundreds of listed companies and a gross domestic product estimated at over $500bn, the city has evolved into a global centre for manufacturing, technology and innovation.
Yet Chinese researchers say the real lesson from Shenzhen was not simply tax incentives or other arbitrary waivers. It was infrastructure.
Unlike many developing economies that rely heavily on tax exemptions and fiscal incentives to attract investors, China’s SEZ strategy focused aggressively on building roads, ports, electricity systems, rail lines, housing and industrial clusters before expecting large-scale industrial growth.
The Chinese government poured massive public investment into Shenzhen’s physical infrastructure, transforming it into a fully integrated industrial ecosystem capable of supporting exports, logistics and manufacturing efficiency.
The government invested heavily in creating an ecosystem where businesses could operate efficiently and competitively.
Efficient governance matters
Speaking during a chat with our correspondent on China’s economic transformation, Assistant Professor Sun Jingying explained that Chinese policymakers deliberately avoided sweeping reforms in favour of carefully managed experiments.
“In China, we don’t make very bold, massive trial experiments. We try out in an experiment on a small scale before full expansion,” she said.
According to her, Shenzhen was chosen partly because it was economically insignificant at the time, making policy adjustments easier if the initiative failed.
“Beijing was too politically sensitive, and Shanghai was too economically important to fail. Shenzhen was just a small fishing village close to Hong Kong where they could observe how the global capital worked,” she said.
Sun noted that Chinese authorities studied Hong Kong’s manufacturing success and recognised that mainland China could replicate the model using lower labour costs and strategic infrastructure investments.
“What Hong Kong people do, Shenzhen people can do as well with one-fifth less salary and lower costs,” she said.
She added that infrastructure formed a major part of China’s value proposition to foreign investors.
“If you come to us, we will build the bridge and the road; you will have discounted electricity bills and free use of land,” she stated.
Technology transfer strategy
China also ensured that foreign investment translated into domestic industrial capacity. International firms were encouraged to transfer technology, management expertise and manufacturing knowledge to local workers.
“The investors were told that they can enjoy the favourite policies and leave us behind your assembling lines and your machines, we will finish the business after 10 years and we’ll operate ourselves,” Sun said.
Former Chinese diplomat Yang Baozhen similarly attributed China’s industrial success to a combination of infrastructure, policy consistency and administrative efficiency.
She explained that investors benefited from simplified procedures through one-stop service centres that reduced bureaucratic delays.
“The government provided one-stop service so foreign companies could get all the necessary papers in one building within a very short time,” she said.
According to Baozhen, low labour costs, security and predictable policies also strengthened investor confidence.
“Foreign companies could make a fortune quickly and easily in China because labour costs were low and the environment was peaceful and secure,” she added.
AfCFTA’s industrial promise
The relevance of these lessons for Africa has become increasingly apparent as countries prepare to take advantage of AfCFTA.
The agreement, which seeks to create a single African market of more than 1.4 billion people, represents one of the continent’s most ambitious economic integration initiatives since independence.
Its objectives are straightforward: reduce trade barriers, stimulate regional manufacturing, promote value addition and increase intra-African trade.
But trade agreements alone do not create industries.
Factories require reliable electricity. Manufacturers depend on efficient ports, roads and rail systems. Supply chains thrive on seamless customs processes and modern logistics infrastructure.
This is where Special Economic Zones become critical.
Properly designed SEZs can serve as industrial platforms that enable countries to manufacture competitively for regional and global markets.
Africa’s capacity challenge
Unfortunately, many African zones continue to function more as isolated real estate developments than integrated industrial ecosystems. A survey by the United Nations Conference on Trade and Development found that over 40 per cent of African SEZs operate at less than a quarter of their capacity, while only 15 per cent run at full capacity.
Africa now hosts about 230 special economic zones across 42 countries, a dramatic increase from just 20 in 1990. Yet despite this expansion, many zones remain underutilised.
Shenzhen lesson
The Shenzhen experience demonstrates that successful industrial zones depend on strategic clustering. Manufacturers, suppliers, logistics providers and technical services operate within the same environment, reducing costs and improving productivity.
Over time, Shenzhen transitioned from labour-intensive production to advanced industries such as telecommunications, electronics and artificial intelligence.
Africa must pursue a similar trajectory.
Without stronger local supply chains and deliberate technology transfer strategies, there is a risk that African economies could become consumers within AfCFTA rather than producers driving continental trade.
Nigeria’s manufacturing ambition
Nigeria offers a compelling example.
Through initiatives such as the Lekki Free Zone and the Ogun-Guangdong Free Trade Zone, the country is attempting to diversify away from oil dependence by expanding manufacturing and exports.
The Lekki Free Zone, supported by the Lekki Deep Sea Port, possesses the potential to emerge as a major industrial and logistics hub serving both domestic and regional markets.
The Ogun-Guangdong Free Trade Zone has also attracted manufacturing investments through collaboration between Nigerian and Chinese partners.
Persistent structural bottlenecks
Yet significant structural challenges remain.
Power shortages continue to raise production costs. Port congestion affects efficiency. Weak road and rail connectivity slows the movement of goods, while regulatory bottlenecks discourage investors.
Mobility barriers persist
Migration-related barriers are also emerging as a growing threat to Africa’s integration agenda.
Although AfCFTA aims to facilitate the movement of goods and services across borders, business executives and industry groups continue to raise concerns over restrictive visa regimes, lengthy immigration procedures and inconsistent entry requirements across African countries.
In recent weeks, reports of tighter immigration controls, deportations, xenophobic tensions and bureaucratic hurdles affecting traders and professionals have highlighted the gap between the vision of a borderless African market and existing realities on the ground.
These constraints affect labour mobility, delay business travel and complicate the deployment of skilled workers required to support regional value chains.
For African trade to thrive, the movement of people must complement the movement of goods.
Policy stability counts
Another lesson from Shenzhen is the importance of policy consistency.
Businesses operating within Chinese SEZs benefited from streamlined regulations and confidence that policies would remain stable over time.
That certainty encouraged long-term investments.
Across Africa, however, frequent policy reversals, multiple taxation, foreign exchange uncertainty and bureaucratic delays continue to increase operational risks.
Industrialisation requires patience.
It also requires predictability.
From vision implementation
President Bola Tinubu, last month in Rwanda, underscored this reality when he called for AfCFTA to move beyond declarations towards practical implementation supported by shared infrastructure, stronger logistics systems, digital trade platforms and deeper private-sector collaboration.
Industrialisation needs foundations
The future of AfCFTA will not be determined by agreements alone.
It will depend on whether African countries can build the infrastructure necessary for industries to compete effectively across borders.
The Shenzhen story offers an important reminder that industrial transformation does not happen by accident.
It requires vision, investment and disciplined execution over decades.
Africa’s defining moment
Africa possesses many of the ingredients needed for success: a youthful population, expanding consumer markets and abundant natural resources.
However, without reliable infrastructure, integrated industrial planning and policies that support both trade and labour mobility, those advantages may remain unreleased.
Lessons for AfCFTA
The message from Shenzhen is clear.
Factories cannot flourish where infrastructure fails.
And AfCFTA cannot deliver its promise unless Africa builds the foundations upon which industrialisation depends.
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