I disagree with a good chunk of this strategy. There’s a lot of factors here that I think are being forgotten or overlooked.
As others have stated, giving all those territories to Italy doesn’t do a lot of good. Yugoslavia, Southern France, Bulgaria. Those are all much better used for Germany for two reasons. 1) Germany is the one who will ultimately dictate victory or defeat, they can much more effectively utilize that money. 2) The units from Bulgaria/money gained from European territories is not essential to Italian playability. The money they make is still so small, that you wouldn’t be able to ferry all of those units you’ve now activated to North Africa. It would take a few turns just to do that. Not an economical use, in my opinion.
Also, you mention the need to neutralize South Africa. While I understand your point on the UK building a mix of tanks and/or mech’s there, that is largely contingent on what Germany is doing up in Europe. If pressure is being applied, the UK will not be able to afford to divert a large some of money to the South Africa factory. That said, to play devil’s advocate, if the UK isn’t being harassed or threatened in any way, then yes, they can pump three units a turn down there. I think if that happens though, you’ve already lost the ability to “neutralize” it anyways.
I don’t fully agree that the Middle East will be untouched by that point either. If I’m ever the UK, I always immediately sent the infantry in West India west toward the Middle East and North Africa. I don’t divert too much UK Pacific money to this venture, but with the activation of Persia, and maybe a tank sent, that force and an aircraft within range can easily overtake the Iraqi standing army, thus robbing the Axis of that boost if they reach the area. The survivors of this small force, along with anything from South Africa, seem often to then reach/reinforce Cairo around the same time.
For German help, I tend to immediately build a destroyer and transport off of Southern France. I’ll then increase that naval force slowly as the game dictates in other areas. Germany, in my mind, is perfectly set up to attack/hold/reinforce Gibraltar when/if the Axis take it. I usually have the Germans defend there, while the Italians build up a defensive force in Morocco. Again, this is assuming they reach that far before the US comes in. But that’s also why I build a German transport right away. They can assist in getting west in North Africa more quickly, while other Italian forces can marshal strength for an assault on Cairo.
I’ll admit, I don’t do it often, but I fully realize and understand the large benefits of Italy can-opening the USSR as well. It’s a well versed strategy. Even if you don’t commit 100% Italian effort to it, even an initial wave early in Barbarossa can pay huge dividends to Germany for the first couple of turns in the assault.
The Italian NO’s are Italy’s best option to see real money come in. And the Italian NO’s seem to me to be something that have to be moved on quickly. Gibraltar, Southern France, and Greece are the obvious three to take and hold for the one NO, Cairo will be harder. Taking essentially all of North Africa also requires some speed. Land troops along the coast to take them all quickly. This is all assumed that the UK navy has been dealt with after Taranto as well, which it should be. If those can be achieved relatively early, it helps to get the strength needed to assault Cairo. German defense of Gibraltar will help alleviate the strain of Italian resources to help make this happen as well.
All in all, I generally see Italy as an Axis stall tactic. While it’s hard to win the game if Italy has done terribly, it also isn’t essential for Italy to go ham over the Mediterranean/Middle East/Africa to assure victory either. By getting NO’s and staying somewhat aggressive, you make the Allies respond. Every IPC spent by the UK and USA that goes toward the Mediterranean is that much less being focused on Germany as it attempts to smash through to Moscow.