Morocco overtook South Africa as the continent’s most industrialized economy last year, as it improved its industrial capacity, diversified its exports, and implemented growth policies, according to a report reviewed by Bloomberg.
“Although South Africa remains a continental industrial powerhouse, the country has been experiencing a steady decline in its industrial competitiveness,” stated the African Development Bank (AfDB) in its 2025 African Industrialization Index.
Years of energy shortages, government corruption, political uncertainty, and rising living costs in South Africa have deterred investment and limited economic growth, with Gross Domestic Product (GDP) expanding, on average, by less than 1% per year over the past decade.
President Cyril Ramaphosa previously estimated that South Africa needs approximately $99 billion in public infrastructure investments, plus an additional $196.2 billion from the private sector, to achieve its infrastructure development goals by 2030.
Gross fixed capital formation in Morocco declined in three of the four quarters of last year, rising only in the final four months of 2025—a sign that companies have begun investing in machinery and buildings, which could help boost the economy’s productive capacity.
Industrial capacity remains heavily concentrated in North and South Africa, which account for the bulk of the continent’s manufacturing output, export sophistication, and industrial competitiveness, the African Development Bank concluded.
