For decades, South Africa was the great success story of African industrialization. Last year, the lead changed hands: Morocco emerged as the top-ranked industrial economy in Africa in the latest edition of the African Development Bank's industrialization index. In its analysis, the Bank said Morocco's growth has been "driven by sustained industrial upgrading, export diversification, and strong industrial policy." South Africa remains the continent's largest manufacturing economy in absolute terms, though its factories have been repeatedly disrupted in recent years by scheduled power cuts known as load-shedding.

The Kingdom's ascent has been built on trade. Since the mid-2000s, Morocco has leveraged its location and dominant phosphate reserves to secure free trade agreements with the United States, the European Union, and fifty other countries. Morocco aims to become to France what Eastern Europe is to Germany, or what Mexico is to the United States: an export-base "workbench." Geography underpins that ambition: Morocco sits roughly 14 kilometers from Europe across the Strait of Gibraltar, holds an estimated 70 percent of the world's phosphate rock reserves, and its Tangier Med complex has grown into the busiest container port in Africa.

Morocco has also positioned itself to profit from the shift to clean energy supply. The country is pivoting its automotive manufacturing sector to build electric vehicles, working with incumbents such as Renault and Stellantis, and hosts Africa's first battery gigafactory. That single 70 gigawatt-hour battery factory in Casablanca is expected to supply a third of Europe's current market. The bet builds on an established base — automotive products overtook phosphates as Morocco's largest export category more than a decade ago, and Renault has operated a major plant in Tangier since 2012 — and it aligns with the European Union's own push, through efforts such as the European Battery Alliance, to bring more EV battery production onshore.

Last year, the government approved construction of a new green hydrogen industrial park, aiming to produce ammonia, steel, and industrial fuel worth a total of $32.5 billion. The EU, for its part, aims to import 10 million tonnes of renewable hydrogen by 2030 under its REPowerEU energy plan.

Aerospace manufacturing has been another strategic focus of Morocco's industrial policy. Airbus has become a strategic partner, alongside investments from Boeing, Thales, and Safran. Morocco's aerospace exports more than tripled in the decade to 2024, reaching almost $3 billion.

The full piece is by Kate Mackenzie and Tim Sahay.

This post appeared on Marginal Revolution.