‘Disruptions to global shipping routes have raised the cost of importing industrial inputs and extended delivery times. This has created further challenges for manufacturers that depend on timely access to machinery, raw materials, and intermediate goods.’
Siaka MOMOH
African manufacturing is in pains as the chaotic military conflict in the Middle-East rages, the Pan African Manufacturing Association (PAMA) has argued.
The conflict, according to PAMA, in its March 2026 edition has triggered disruptions across multiple pillars of the global economic system. Energy markets have been severely affected as tensions escalate around the Persian Gulf, while maritime and aviation logistics have been disrupted due to security concerns and restrictions in regional airspace. These disruptions have translated into rising global shipping costs, surging oil prices, and growing uncertainty in financial markets.
It adds that according to the International Energy Agency (IEA), geopolitical tensions in the Persian Gulf continue to pose significant risks to global energy supply, as the region remains one of the most important sources of oil and Liquefied Natural Gas (LNG) exports to the global economy.
PAMA holds that recent military confrontations and security threats in the Gulf have disrupted maritime traffic and raised serious concerns about the safety of key shipping routes used for global energy transportation. As a result, global energy markets, shipping networks, and industrial supply chains are experiencing heightened volatility.
It argues: “For Africa’s manufacturing sector, which is already facing structural challenges such as high energy costs, limited industrial infrastructure, and currency volatility, these developments introduce an additional layer of uncertainty with potentially significant implications for industrial production.
“The ripple effects of the U.S.–Israel–Iran conflict on African manufacturers are becoming particularly significant. This is because many industries on the continent rely heavily on petroleum products for electricity generation, logistics, and packaging materials such as plastics. As a result, higher energy costs translate into increased production expenses, which are already triggering higher prices and weakening demand for industrial goods.
“In addition, disruptions to global shipping routes have raised the cost of importing industrial inputs and extended delivery times. This has created further challenges for manufacturers that depend on timely access to machinery, raw materials, and intermediate goods.
“Furthermore, the conflict has reinforced the strong relationship between global oil prices and currency movements. As crude oil prices rise in the international market, demand for the U.S. dollar tends to increase, strengthening the currency relative to others. This has contributed to the depreciation of many African currencies, further increasing the cost of imported industrial inputs and exacerbating inflationary pressures.
“Finally, disruptions in fertilizer supply could indirectly affect agro-processing industries. Sustained constraints in fertilizer availability are likely to increase agricultural production costs and reduce the supply of raw materials for food processing industries across the continent.”
Policy Imperatives
PAMA says the current geopolitical crisis highlights the urgent need to strengthen the resilience of Africa’s manufacturing sector as follow:
- The development of domestic refineries and strategic oil reserves is critical for African governments to pursue, to guard against future shocks arising from energy supply disruptions, as witnessed in the current geopolitical crisis.
- African economies must reduce excessive dependence on imported industrial inputs by strengthening backward integration, regional manufacturing networks, and local value chains.
- A stable and affordable energy supply is essential for industrial competitiveness. Governments, in partnership with relevant private sector stakeholders, should accelerate investments in renewable energy, gas infrastructure, and regional power integration.
- Expanding domestic production of fertilizers, petrochemicals, steel, and industrial chemicals will help reduce vulnerability to external supply shocks.
- Efficient transport corridors, ports, and logistics systems are necessary to lower trade costs and improve industrial competitiveness.
- Prioritizing the patronage of locally made products will help support and stabilize industrial production amid global pressures.
