Definition: In the present paper, the “Localization Potential” is defined as the proportion of added value of a manufactured good that can be localized in a given country.
The graphs below show the estimated localization potential for green industries in Africa, in the short term (1 year) and medium term (5 years), by country category.
The first graph summarizes the estimated location potential for “A” countries (dense manufacturing sectors). It can be seen that short-term potential is far from negligible. The lowest potential is estimated at 30%, and concerns the manufacture of products containing batteries and/or electric motors, such as electric-assist bicycles and electric cars. Short-term potential climbs to 40/50% for the wind farm and mini-grid manufacturing, and reaches 100% for bicycle manufacturing. In the medium term, these countries should be able to set up complete integrated value chains, with a localization rate of 100%. To achieve this, they will need to capitalize on the experience they have already acquired in the automotive, aeronautics and space sectors.
The second graph shows the estimated localization potential for “B” countries (moderately developed manufacturing sectors). Short-term potential ranges from 8% to 70%, depending on the sector. In the medium term, these countries will be able to achieve localization rates of between 30% and 100%, depending on the sector, provided they develop specific expertise in sectors such as electronics manufacturing, IT and chemicals.
The third chart summarizes the estimated localization potential for “C” countries. In the short term, the potential is almost non-existent, as the existing manufacturing base has too many shortcomings in terms of both sector expertise and industrial integration. In the medium term, the potential for localization will remain limited to the manufacture of parts with a low degree of technological complexity. Estimated rates are not negligible, however, and fluctuate between 8% and 70% depending on the sector. This will require the development of industrial expertise, which is currently underdeveloped.
Detailed working paper: