The Pan-African Manufacturers Association (PAMA) has warned that escalating geopolitical tensions, particularly the U.S.–Israel–Iran conflict, are placing renewed pressure on African manufacturing through rising energy costs and continued disruption of global supply chains for fertilisers and industrial inputs.
In its March 2026 News Bulletin, the association said many African industries remain heavily exposed to petroleum-linked cost shocks, given their dependence on energy for power generation, logistics, and the production of plastics and other industrial materials. It noted that the current tightening in fertiliser supply, linked to reduced urea exports, has begun to raise input costs for agro-processing firms across the continent.
PAMA further observed that the rerouting of vessels around southern Africa, driven by heightened maritime security risks, has increased both shipping costs and delivery timelines for machinery and raw materials, with knock-on effects on industrial demand and production efficiency.
The Bulletin stated that the global manufacturing system is highly sensitive to geopolitical developments affecting energy markets and trade routes, noting that the conflict escalation on February 28, 2026, has already triggered significant volatility across global supply chains.
According to PAMA, energy markets are under renewed strain due to rising tensions in the Persian Gulf, while maritime and aviation logistics face heightened security risks. This has translated into higher global shipping costs, rising oil prices, and increased uncertainty in financial markets.
“For the African manufacturing sector, which is already grappling with high energy costs, limited industrial infrastructure, and currency fluctuations, these developments add a layer of complexity,” the association said.
It added that disruptions to key maritime corridors have reduced commercial traffic in strategic routes, forcing vessels to adopt longer and more expensive alternatives, further escalating logistics costs for manufacturers reliant on imported inputs.
PAMA stressed that while the crisis presents significant challenges, it also creates an opportunity for African manufacturers to accelerate operational resilience and reduce structural vulnerabilities in production systems.
“Rising energy costs can lead to increased production expenses, compelling manufacturers to find innovative solutions to maintain competitive pricing and demand,” the Bulletin noted, adding that supply chain disruptions make timely access to machinery, raw materials, and intermediate goods increasingly critical.
The association also highlighted the link between global crude oil prices and currency movements, noting that higher oil prices often strengthen the U.S. dollar, with adverse implications for African currencies. This dynamic, it said, further inflates the cost of imported industrial inputs and feeds into broader inflationary pressures across the manufacturing ecosystem.
To mitigate these risks, PAMA called for accelerated investment in domestic refining capacity and the development of strategic petroleum reserves to cushion against external supply shocks. It also advocated stronger backward integration, expanded regional manufacturing networks, and deeper localisation of value chains to reduce import dependency.
According to the association, such measures are essential to building long-term resilience and ensuring sustainable industrial growth across the continent amid an increasingly volatile global environment.
