From Fields to Factories: How Capital-Intensive Diversification Sidelines Women from Africa’s Industrial Growth

By Stéphane Mbiankeu Nguea & Adeline Nembot

Executive Summary

African economies are diversifying as they transition from extractive industries to newer sectors, resulting in the creation of more diverse employment opportunities. While diversification is beneficial for growth, it has been accompanied by a concerning trend: a decline in female participation in the industrial workforce, which typically offers the highest stability and income prospects. This decline does not necessarily have to be seen as an inevitable outcome of economic changes; rather, it can be viewed as an unintended consequence of policy failure to address certain issues. The current paper explains why this is happening and suggests a series of sequenced policy recommendations.

Key Messages

• Diversification reduces women’s presence in high-risk informal trade, but under current policy conditions, it also acts as a barrier to industrial jobs.
• Without deliberate policy design, the African Continental Free Trade Area (AfCFTA) risks widening gender inequality in manufacturing and logistics. Binding gender provisions in implementation protocols merit serious consideration.
• To reverse exclusion, governments should move away from unconditional industrial subsidies. Tax breaks and subsidised land can be made conditional on firms hiring, training, and retaining women in technical roles, with transparent reporting and enforceable consequences.

Introduction

The policy problem addressed in this brief is the changing landscape and composition of employment due to economic diversification in Africa, where women are being left behind as industrial sectors expand. Women are clearly at the centre of the local economy in Yaoundé and Dakar, where they trade, negotiate, and maintain household revenues. They have a high level of economic activity, but it is mostly focused on vulnerable, informal labour. Now imagine a factory located on the outskirts of the same city. The majority of workers on the assembly line that produces goods for export are men. This disparity highlights a structural exclusion that is not sufficiently addressed by the existing industrial strategy. The question is: under what conditions does diversification exclude women from industrial employment?  In Africa, women make up about 40 per cent of owners of small and medium enterprises (SMEs), but they get just 7 per cent of SME financing.  While female labour force participation is about 64 per cent in Sub-Saharan Africa, still with women overrepresented in informal and low-paid work, a recent study found both a reduction in vulnerable employment for women as economies diversify and a simultaneous negative effect on their industrial employment share. This brief draws on these findings to examine the causal mechanisms at work and the policy choices that can alter them.

Diagnosis: The Double–Edged Sword of Diversification

When countries move beyond raw material exports, they create new jobs and become more resilient to external shocks. However, the evidence suggests to a consistent pattern: diversification is positively associated with women’s political representation and a reduction in their most vulnerable employment, yet it is negatively associated with their employment in the industry. This relationship holds across countries with different levels of productive capability. Recent ECOWAS data indicates that women account for approximately 74% of informal cross-border trade—exactly the kind of vulnerable activity that more diversified economic structures can help formalise. Diversification has thus helped shift some women into more stable roles.  The significant proportion of young African women working in informal, low-paying services jobs is especially concerning. According to the ILO employment estimate for the continent, women represent less than 55% of the labour force participating in the region’s economies, with those in Sub-Saharan Africa forming one of the least secure parts of these employment structures.  The ILO flagship report on youth employment reported that 61% of the approximately 62 million young Africans who are now not in employment, education or training (NEET) are women.

Why Diversification Can Exclude Women from Industry: The Causal Chain

This mechanism works via policy-mediated routes and can be outlined in three stages.

In the first stage, diversification changes the structure of the economy. While countries acquire new productive capacities, their economies shift from labour-intensive sectors such as textiles, agro-processing, and light assembly – in which many women used to work – to more capital-intensive sectors including machinery manufacturing, chemicals, and high-tech industries.

In the second stage, there is a need for technical and scientific expertise in capital-intensive sectors where there is less representation of women due to gender-segregated educational processes. In other words, when girls are dissuaded from taking an interest in science and technology in education, they are unlikely to find employment in capital-intensive industries after finishing school.

Third, even if women have the required qualifications, there are obstacles in terms of work organisation. Work automation leads to the replacement of routine production jobs in which many women worked. Industries are built far from people’s homes without any facilities that would allow mothers to look after their children at work.

This is not a natural law – it is a consequence of policy choices (on education, industrial incentives, labour regulation) that have not been designed with gender inclusion in mind. The correlation is strong, and the causal chain runs through these policy‑mediated channels.

Why This Matters for African Continental Integration

The AfCFTA is intended to form an integrated market of 1.4 billion people with a GDP of $3 trillion, with intra-regional trade set to increase by more than 50%. The critical question here is to whom this advantage will accrue. While women are increasingly disadvantaged in the workforce within today’s industrial sector, any increased activity in manufacturing, processing, or transportation due to the AfCFTA initiative won’t necessarily lead to their inclusion in this market. In other words, there is a serious threat that the African trade policy’s flagship programme might exacerbate existing gender disparities, unless this issue is addressed in its design protocols. The rationale of this concern follows the same logic as the Sustainable Development Goals (SDGs). As the United Nations SDGs note, decent work can be achieved for all people only when the obstacles to access to the job market faced by half the workforce are removed. Likewise, the African Union Agenda 2063 speaks of a transformed continent – but the extent of this transformation would critically depend on whether women are part of the industries transforming the continent. Across African countries, these barriers are similar: stereotyping in education at an early age, inadequate childcare facilities, and hostile environments at workplaces.

Policy Recommendations

The recommendations below are sequenced by time horizon.

Short Term (1–2 Years)

Require mandatory reporting of gender-disaggregated data among industrial incentive recipients. Any company that receives tax incentives, land grants, or technical loans must be compelled to publish its workforce demographics broken down by gender, by profession, and by wages annually. Failure to comply will result in fines or loss of eligibility for future initiatives. The framework to do so is already enshrined in domestic investment legislation, but consistent implementation is the challenge. Monitoring could appropriately be delegated to investment agencies under the purview of ministries of industry.

Create a National Gender and Economic Diversification Observatory (NGEDO). Hosted either at the National Statistical Agency or at the Ministry of Economy, this entity would track and analyse the participation of women in industrial occupations across different economic sectors. Detailed and timely information enables policy adaptation before exclusionary tendencies set in. Funding is readily available from national statistical budgets, enhanced with technical expertise from international partners like the World Bank and UN Women.

Medium Term (3–5 Years)

Establish incentives through gender-inclusivity requirements: Incentives like tax holidays and subsidies should come with conditions that encourage firms that practice gender-inclusivity in hiring and retaining talent. Other possible incentives may include encouraging firms that have mentorship programs and make their gender policies known. Penalties for not adhering to the requirements could start with being warned and later progress to the revocation of the benefits. However, the major challenge in implementation would be administrative capacity, whereby bodies issuing the incentives would require compliance units, which entail minor costs.

Reform technical education at its sources: The gender gap in technical education is not caused by the lack of skills, but rather the stereotype. A nationwide initiative seeking to ensure equal opportunities in technical education should involve: educational materials that feature women who have been successful in technical fields as examples; mandatory training for instructors on unconscious bias; scholarship programs aimed at female students pursuing tertiary education in technical fields; and mentorship between female students pursuing technical education and women employed in technical professions.

Long Term (5–10 Years)

Establish a continental charter on gender-sensitive industrialization: Legal obligations could take the form of requirements in African Union (AU) processes, such as quotas for women’s participation in mining and industrial project consultations, gender-based benefit sharing, occupational health, and safety laws tailored to the needs of women workers. The political buy-in necessary for such a legal obligation is difficult to achieve on a continental scale; an easier place to start would be a voluntary AU declaration coupled with national voluntary action plans.

Make investments that will affect inter-generational change: A more lasting strategy to influence the employment dynamics of industrialization is through sustained investments in girls’ education from secondary through tertiary levels. This means financing scholarship schemes, educational infrastructure development, and initiatives dealing with issues such as early marriage and teenage pregnancies. The international community can help finance such initiatives through their respective education sector budget support programs.

Conclusion

African economies are becoming increasingly diversified, which positively impacts growth and international competitiveness. However, from the existing data, it appears that such a trend under the prevailing economic policies does not always equate to inclusiveness. For instance, women benefit in certain aspects, such as reduced risks of job insecurity and higher levels of political participation, while being disadvantaged in terms of manufacturing employment. The dynamics leading to this situation can be determined through skill-biased technological advancement, sex disparities in education, gender discrimination, and inadequacies in child-rearing services. These factors, however, are not unalterable. The issue here revolves around the correct sequence and approach.