African countries are pursuing localisation initiatives for some goods and products and the capital equipment manufacturing industry should focus on making investments in these countries to develop and deepen regional value chains for long-term sustainability, industry efficiency programme National Cleaner Production Centre business support manager Julie Wells has suggested.

In a panel discussion at the Manufacturing Indaba, in Sandton, on October 23, she pointed out that South Africa imports billions of rands worth of capital equipment each year, despite having an established components and capital equipment manufacturing industry.

Doing business in Africa could, however, be daunting owing to the different requirements in different countries and could be perceived as risky by investment funds, speakers on the panel noted.

Ecosystem instruments, such as special economic zones, public-private partnerships and the formation of partnerships in the countries, could help funding flow more easily into the sector, said advisory and investment firm Moshe Capital VP and head of advisory Mangaliso Vilakazi.

"Owing to the complexity in markets, manufacturers investing in broadening their Africa footprints need expertise, but partnership models are important and can provide some of the in-country expertise and experience needed," he said.

"It is particularly difficult for small and medium-sized enterprises to secure funding to grow their footprints in Africa, and it is easier for larger organisations or partnerships to source funding. However, while regional funding is slowly growing, partnerships and export-led models can help companies to capitalise on the trends that are present."

Meanwhile, the Industrial Development Corporation (IDC) will focus on involving local industry more with opportunities in Africa now and into the future, said IDC machinery, equipment and electronics head Kugan Thaver.

"We are going out and building relations again and working to develop markets. Our involvement in other African countries was subdued, but we are engaging to identify opportunities again."

"South Africa has not been as proactive as it should be in developing trade relations with greater Africa. We need to engage further with governments and industry – especially given our advanced capital equipment sector – on how we can incorporate countries' strategies into our own," he said.

The African Continental Free Trade Agreement (AfCFTA) presents some challenges but also significant opportunities, especially for South Africa's well-established mining equipment sector, he added.

"We do import some equipment, but we have a well-established sector with a good logistics and services base in place. However, we need to cooperate more with partner countries."

With many countries aiming for local assembly, the strategies of South African manufacturers must engage with these requirements and the industry should develop products that have the backing of partners in-country, said Thaver.

Forming infrastructure companies would help to draw in capital that was available, particularly if they were focused on developing infrastructure between regions. It was up to Africa to foster and spearhead these types of initiatives that would also help to accelerate the development sought, said Vilakazi.

"Similar to telecommunications being part of the puzzle to unlock development by enabling digital solutions, focusing on infrastructure can have the biggest impact on supporting manufacturing," he said.

It is up to African countries and industries to be pioneers, better organise themselves and develop an appetite for industrialisation, as it was not easy to achieve, noted mining equipment manufacturer JA Engineering Works CEO and managing partner Matimba Mahange.

"It takes a lot of grit and there are no shortcuts. If, for example, we look at productivity, South Africa must 'up its game'. Showing that we are working to develop the capital and mining equipment industry in Africa, and demonstrating that we are doing what is necessary to attract capital, is needed to attract more investments.

"Further, the better organised the industry is across regions, the better it is able to share ideas and competencies, and the better it is able to compete globally.

"We tend to organise as individual companies or countries, but if we, for example, consider Botswana's citizen economic empowerment programme within Southern Africa, we can extend our influence beyond our borders and influence policy changes to grow in the region. It starts with us."

For example, a special economic zone in Kitwe, in Zambia - which has a large population of capital equipment - is attracting significant numbers of original equipment manufacturers to establish workshops and factories.

"The government created the zone and provides incentives for multinationals to set up shop in Kitwe. This is a good example of how developing local capacity in countries can be done well," Mahange said.

The trend to localise industries and manufacturing was an "allergic reaction" to the way business had been done before, said Vilakazi.

However, this trend was broader than only establishing manufacturing shops and included collaboration to drive greater industrial development. This collaborative approach presented win-win solutions for local and international companies by deriving mandates from industries in these markets, he said.

"Each country has its pride and, through equitable ownership of value chains, we will find greater success."