Africa’s celebrated advances in mobile money and digital payments are failing to translate into industrial transformation, according to a new index that measures economic readiness across the continent, findings that challenge a decade of investor optimism about the role of financial technology in African development.
The 2025 Real Economic Development (RED) Index, published by the Business Council for Africa, assessed 54 African countries against 13 factors spanning structural capabilities, growth mechanisms, and institutional constraints.
Its central finding is that most African economies have developed the mechanisms designed to accelerate industrialisation without first building the foundational capabilities that make industrialisation possible.
The index distinguishes between what it terms Engines, that is, structural prerequisites including reliable electricity, strong banks, transportation networks, STEM education, and national industrial champions, and Accelerators, which include payment systems, public-private partnerships, and economic openness.
It posits that Accelerators applied without functioning Engines produce economic growth that does not generate structural transformation.
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“Countries like Kenya, Ghana, Nigeria, and Rwanda have strong payment systems and openness, but weak power, STEM, transport, and industrial champions. This creates growth without transformation,” a part of the report reads.
At the country level, it noted that Ghana’s fully interoperable payment switch, Kenya’s M-Pesa ecosystem, and Nigeria’s instant payment network, collectively among the most cited examples of African financial innovation, are each acknowledged by the index as genuine achievements.
All three countries receive positive scores on payment systems. Yet Ghana and Kenya each score only five out of a possible 13 points overall, while Nigeria scores six.
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The gap between Accelerator performance and total score reflects the index’s finding that payment infrastructure, however sophisticated, cannot substitute for the structural conditions required to support large-scale manufacturing, export-oriented production, and technological upgrading, it noted.
Ghana’s score of five places it in the index’s ‘Vulnerable’ category, defined as countries where “progress exists but remains shallow, inconsistent, or fragile.” The assessment attributes Ghana’s position specifically to underdeveloped Engines, noting digital strength and openness as the country’s primary assets while identifying electrification at industrial scale, national champions, and STEM capability as material deficiencies.
A framework grounded in comparative precedent
The RED Index draws its benchmarks from economies that achieved sustained industrialisation, including South Korea, Malaysia, Vietnam, Brazil, and Morocco. In each case, the index argues, Accelerators were deployed after structural foundations were established, not before or instead of them.
Morocco is the only African country to achieve the index’s maximum score of 13, reflecting what the report describes as decades of coherent alignment across power infrastructure, logistics, industrial skills, and strategic openness. Egypt scores 12, South Africa 11, and Mauritius 10, placing all four in the index’s ‘Leaders’ category.
The remaining 50 countries score eight or below. Rwanda, at eight, represents the highest-scoring economy outside the Leaders group, recognised for strong institutional governance and controlled structural constraints. The index nonetheless flags shallow industrial engines as a ceiling on Rwanda’s transformation potential.
The index identifies a further systemic problem in its assessment of Decelerators; factors that slow industrial progress regardless of Engine or Accelerator strength. These include corruption, demographic pressure, and security instability.
Of 54 African countries assessed, only seven, namely Botswana, Cabo Verde, Mauritius, Morocco, Namibia, Rwanda, and Seychelles, have all three Decelerators sufficiently contained. Every other country on the continent has at least one Decelerator materially constraining industrial growth, with the majority carrying all three simultaneously.
The index is careful to note that Decelerators do not render industrialisation impossible. “Successful countries managed these Decelerators through credible institutions, political stability, and disciplined governance. For Africa, containing these Decelerators is essential to sustaining long-term momentum,” it pointed out.
The RED Index, with a foreword by Aliko Dangote, President and Chief Executive of the Dangote Group, is described as a practical lens for assessing industrial readiness across the continent. The Business Council for Africa, which publishes the index, was established in 1956 and operates as a registered not-for-profit organisation.
The index’s broader implication for policymakers is that digital and financial sector development, while necessary, cannot serve as a proxy for industrialisation strategy.
“Africa is not lacking ideas. What it lacks is scale, coherence, and continuity,” the index stated.
