Turning investment potential into results in Africa
Travel through cities from Dakar to Nairobi and the entrepreneurial energy is hard to miss. You see ambitious businesses with the potential to grow, but too little of the world’s private capital is reaching them. Africa needs to create an estimated 18 million new jobs each year to keep pace with its growing population. A stronger manufacturing base can help meet that need by raising productivity, building local supply chains, increasing exports, and creating higher-quality jobs—strengthening economic resilience and livelihoods.
Yet promising manufacturers looking to build a factory or expand production often struggle to secure investment. Their businesses may be viable, but they may need help developing the financial models, market analysis, and business plans investors need.
Manufacturing Africa was created to help address this. Funded by the UK government, the program brings together a private-sector consortium that works with manufacturers and investors early in the process, helping promising businesses become ready for investment. McKinsey leads the consortium alongside BDO, Open Capital, Reformatics, Steward Redqueen, and TechnoServe.
The process starts by identifying promising opportunities and understanding what may be holding investors back. Projects that meet the program’s inclusion, environmental, and other criteria can then receive tailored support from Manufacturing Africa—from strengthening growth strategies and financial models to conducting market analysis or sharpening the investment case.
In 2024, deals that closed with the program’s support represented 22 percent of all tracked private-capital deals across sectors in sub-Saharan Africa.
After several years, the results suggest this model can work at a significant scale. Manufacturing Africa has helped mobilize £2 billion in foreign direct investment and supported the creation or protection of more than 150,000 jobs. In 2024, deals that closed with the program’s support represented 22 percent of all tracked private-capital deals across sectors in sub-Saharan Africa. For every £1 of public funding spent on the program, £34 of private capital has been mobilized.
These results are striking. They suggest that helping more promising businesses become investment-ready could significantly increase the flow of private capital into African economies.
Making good businesses easier to invest in
Before committing capital, investors want to understand a business and the market in which it operates. In established markets, companies can draw on networks of advisers, banks, data providers, and other specialists to help make their case to investors. Those networks can be much thinner in African markets, leaving promising businesses without the expertise they need to secure investment. Manufacturing Africa works alongside companies to help fill those gaps.
The experience of Kentegra Biotechnology in Kenya shows what this can look like. Kentegra produces natural insecticides using pyrethrum grown by local farmers. As the company looked to expand, Manufacturing Africa and McKinsey helped it assess different growth opportunities, understand its market, strengthen its financial model and investment materials, and communicate its social and environmental impact.
Kentegra subsequently raised $25 million in funding. That capital is helping it expand production while creating jobs and new or enhanced sources of income for thousands of farmers.
Across the program, Manufacturing Africa has found that the right support can change how investors see an opportunity. Once the economics are tested, the risks better understood, and the investment case more clearly articulated, businesses that initially appear difficult or risky can look materially different to investors.
Much of the debate on mobilizing private capital focuses on whether enough financing is available and whether investors are willing to take the risk. While those questions matter, Manufacturing Africa’s experience points to another, often overlooked constraint: Promising businesses may simply need more support to become ready for investment.
When one investment makes the next easier
The impact of successful deals can extend beyond the businesses receiving investment. As more deals are completed, they can help build the local expertise and networks needed to support future investment.
As more well-prepared businesses attract capital and perform, investors gain a better understanding of what works and become more confident assessing the next opportunity.
Successful investments can also build investor confidence. As more well-prepared businesses attract capital and perform, investors gain a better understanding of what works and become more confident assessing the next opportunity.
Over time, it can create a reinforcing cycle: Stronger local capabilities help more businesses become investment-ready, while a growing track record of successful investments encourages more capital into the market.
Unlocking investment at scale
Manufacturing Africa has identified roughly £12 billion in potential investments. Converting that pipeline into factories, businesses, and jobs will require continued work from manufacturers, investors, governments, and other institutions. But the results to date suggest that public funding, deployed at the right point in the investment process, can help unlock much larger amounts of private capital—with implications well beyond manufacturing.
That lesson is particularly relevant at a time when public finances are under pressure and development funding needs to go further. Some investment barriers may require new financing approaches or policy reform. But sometimes the constraint is more basic: Viable businesses and willing investors exist, but the detailed, deal-by-deal work required to bring them together has not been done. Manufacturing Africa’s experience suggests that this often-overlooked work can make a meaningful difference.
Viable businesses and willing investors exist, but the detailed, deal-by-deal work required to bring them together has not been done.
Sharing what the program learns can extend that impact further. Manufacturing Africa has conducted more than 55 studies of manufacturing sectors, and its practical learning materials have been downloaded more than 4,000 times. The ambition is to reach many more businesses, investors, and institutions across the continent.
Ultimately, the opportunity is bigger than any one program. By helping more manufacturers become investment ready, building investor confidence, and strengthening local capabilities, the aim is to create markets where successful investments make the next ones easier—and where perceived risk increasingly gives way to demonstrated returns.
