Innovation fuels sustainable industrialisation and development in Africa

By André Joubert, General Manager of BAT South Africa and Area Director for BAT’s Sub-Saharan African operations
As 2024 draws to a close, the recent Africa Industrialisation Day served as a timely opportunity to reflect on the continent’s progress towards sustainable development and the role that technological innovation, enhanced trade, and increased productivity can play in boosting economic growth and development.
In marking the day, UN Secretary-General António Guterres highlighted the promise of the African Continental Free Trade Agreement (AfCFTA), the continent’s young, innovative, and entrepreneurial population, and its growing leadership in renewable energy.
These factors position Africa as an integrated global economic force across diverse sectors, he said.
Guterres noted that artificial intelligence could sharpen the continent’s competitive edge in green manufacturing, boosting productivity, job creation, and African prosperity while reducing greenhouse gas emissions.
The African Union Commission (AUC) also added its voice in underscoring the role of industrialisation in addressing socio-economic challenges including poverty, unemployment, and inequality.
Africa’s joint industrialisation approach and implementation of the AfCFTA are key to stimulating industrial value addition, enhanced productivity, regional value chain development, job creation, and the transition to a green and sustainable economy.
In this context, BAT’s global vision of Building a Smokeless World aligns with the broader goals of Africa’s industrialisation.
As the world changes at unprecedented speed, bringing innovation with agility is critical to a multicategory company like ours.
As we accelerate our transformation to achieve this vision, BAT is driving product innovation, backed by science, to provide adult smokers with smokeless alternatives.
Since the launch of our first vapour product in South Africa in early 2021, we have been on a transformation journey to become a truly multi-category consumer products business.
The case of BAT is just one example of how the rapid evolution of technology is creating multiple opportunities for Africa to leapfrog over legacy constraints on industrialisation and economic development.
These opportunities address traditional development needs – from conventional bricks and mortar infrastructure to large-scale energy and transport network utilities – while accounting for the continent’s vast geography and distances between economic hubs.
Already, the advent of mobile telecommunications technology has fast-tracked access to financial services through cellphone banking, largely eliminating the need for traditional bank branches.
Similarly, breakneck advances in distributed energy generation technologies including solar, hydrogen and battery solutions, coupled with steep declines in the costs of these technologies, are opening up opportunities for Africa to overcome energy poverty and stimulate economic activity even in remote locations.
Meanwhile, the scaling up of e-commerce platforms and digital payment solutions creates opportunities for entrepreneurship that would have been inconceivable five or ten years ago.
Coupled with implementation of the AfCFTA and the demographic promise of the continent’s youthful, entrepreneurial population, these developments point to the enormous potential waiting to be unleashed.
The risk, however, is that narrow national and sectoral interests may get in the way of this potential being fully realised as the spectre of protectionism and tariff wars looms amid increasing geopolitical tensions.
There is also a risk that short-sighted and incompatible local regulatory and fiscal regimes will be an unnecessary drag on vibrant innovation and commerce.
For example, the tobacco industry in South Africa has grappled with the unintended consequences of well-meaning regulation aimed at reducing smoking prevalence, such as unsustainable excise tax policy, which has had the opposite effect by stimulating the growth of illicit trade in the country, leading to increased availability of illicit tobacco products.
Such regulatory missteps have the potential to derail the promise of the AfCFTA by creating mismatches between the authorities’ regulatory intent and states’ capacity to administer and enforce it, opening the door for unscrupulous players to take advantage.
In this regard it will be important to couple the easing of restrictions on the movement of goods across borders within the AfCFTA, with significant investment in the capacity of authorities to trace such movement from the point of origin, to prevent an explosion in counterfeiting, grey imports and smuggling from outside the continent and even within its borders.
Key for innovation to flourish, is an evidence-based and enabling regulatory environment that does not seek to micro-manage economic and consumer behaviour, but rather, enable informed consumer choice.
An excellent example with far reaching global impact is the deregulation of spectrum licensing for wireless communications by the US Federal Communications Commission (FCC) more than two decades ago.
This shift in approach allowed innovators to use certain frequency bands without the need to obtain an individual licence, facilitating the development of wi-fi, Bluetooth, the Internet of Things (IoT) and other wireless technologies that are ubiquitous today.
The economic impact of unlicensed spectrum use has been huge, with trillions of dollars added to the global economy through improved productivity, new industries, and more accessible internet connectivity.
As we look ahead to 2025, Africa stands at a crucial juncture.
The lessons learned and progress made in areas such as digital transformation, renewable energy adoption, and regional trade integration provide a strong foundation for the continent’s continued industrialisation journey.
The coming year presents fresh opportunities to build on these achievements and accelerate the pace of sustainable economic development.
Africa could benefit enormously from emulating this approach to facilitate innovation and entrepreneurship that would accelerate economic development and industrialisation at scale, creating the opportunity to generate employment and lift millions out of poverty.