Epileptic electricity supply, inadequate transportation networks, and insufficient water and sanitation facilities have been identified as impediments to the development and operational efficiency of industrial parks in Africa.
 
This, according to a recent report by the African Export-Import Bank (Afreximbank) tagged, ‘Industrial Parks and Industrial Development in Africa’, one of the most prominent challenges facing industrial parks across the continent is infrastructural deficiencies, even though significant progress has been made in developing physical infrastructure.
 
The report said infrastructural deficiencies can disrupt manufacturing activities, increase transport costs, and delay the movement of goods, ultimately affecting the competitiveness and growth potential of businesses within these parks.
 
It added: “Inadequate infrastructure, such as unreliable electricity supply, poor transport networks, and insufficient water and sanitation facilities, still pose significant barriers to the efficient operation of industrial parks. Till today, the Calabar Free Trade Zone suffers from frequent power outages, which significantly disrupt manufacturing activities.” 
 
Furthermore, the report revealed that most of the industrial parks have been designed to house foreign investors, giving little room to indigenous industrialists. It added that while foreign companies might serve as a springboard for the development of competitive domestic industries, they can also impede progress by neglecting to pass technology to domestic businesses and establishing reciprocal relationships within the national economy.
 
“This problem is worsened when IPs are designed in a manner that further reduces the proximity between foreign-owned firms and indigenously owned firms.”
The report added that policy designs to support IP development have tended to ignore long-term gains while favourable IP regulations and policies are inconsistent.
   
“The short-term gains of IP development include employment creation, stimulation of exports, and FX earnings. Long-term gains include the effects on the country’s economic transformation in terms of technology transfers, forward and backward linkages, demonstration effects, and other spillovers,” it noted.
 
To boost industrial park operations in Africa, the report called for the strengthening of public-private partnerships (PPPs) in IP development and use. The report asked countries to stimulate export-led industrialization, adding that export-oriented IPs are likely to attract foreign industrial investors, even when the domestic market is small, as it is in most low-income economies of Africa,” it stated.
 
It advised stakeholders to accelerate technology adoption to increase efficiency, streamline logistics, upgrade infrastructure, and leverage trade agreements on the continent, including the Africa Continental Free Trade Area (AfCFTA).

The report also urged governments to link IP design to policy reforms that not only incorporate local content but also feed into more comprehensive development plans for African economies.
 
Urging stakeholders to put in place policies that promote business-to-business linkages in African IPs, it added that available statistics show that most of the private sector enterprises in Africa are MSMEs.