Fix Power, Cheaper Finance, Logistics For Africa To Industrialise, Pan-African Manufacturers Urge

Power shortfalls, expensive credit and poor logistics are hampering African manufacturers’ efforts to compete, a new Pan-African Manufacturers Association (PAMA) survey shows.

The PAMA Industry Pulse Survey of more than 100 manufacturers found electricity outages, rising cost of borrowing and weak transport networks consistently ranked as the top constraints to competitiveness. Yet manufacturers remain cautiously optimistic about the third quarter, citing improving supply chains, growing intra‑African trade under the AfCFTA and easing global energy prices.

Still, firms say stronger industrial performance will need stable policy, better infrastructure and cheaper finance. The survey covered sectors from agro‑processing and brewing to pharmaceuticals and banking, and found operating costs for many businesses have more than doubled as unreliable power forces heavy use of generators and alternative fuels.

In Nigeria, manufacturers rely heavily on diesel and gas to run plants. Prices of both fuels have jumped more than 100 percent in recent months amid geopolitical disruption, pushing energy costs to 30–40 percent of production for energy‑intensive goods such as cement, steel and food processing. Nigerian factories spent N1.4 trillion on power generation in 2025, the survey notes — a major drag on competitiveness that makes some African products costlier than imports from Asia, Europe and the U.S.

Logistics inefficiencies compound the problem by raising costs, delaying deliveries and fracturing supply chains. Until goods can move faster and cheaper across the continent, manufacturers will struggle to scale regionally. Those bottlenecks also push up food prices, increase waste and amplify vulnerability to climate shocks, conflict and global supply disruptions.

The report stresses that competitiveness cannot rely solely on favourable exchange rates, lower commodity prices or fiscal incentives. “Operational efficiency, product quality and process reliability are decisive in increasingly competitive regional and global markets,” PAMA said.

PAMA urged AfCFTA officials and national policymakers to apply that same logic to regional trade: success will hinge not just on tariff preferences but on manufacturers’ ability to meet rules of origin, comply with technical standards, build reliable supply chains and compete consistently across markets.

The organisation argued that competitiveness depends on the interaction of industrial policy, macroeconomic stability, infrastructure, finance, regulation, supply‑chain resilience and firm capability — gains in one area cannot fully offset weaknesses in another. It called for coordinated action by governments, finance bodies, trade institutions and industry.

Key recommendations include guaranteeing reliable power and transport, maintaining stable policy frameworks, and expanding affordable, long‑term local‑currency lending — especially for SMEs — from development finance institutions. PAMA also urged AfCFTA institutions to accelerate implementation with simpler customs procedures, recognized standards and digital documentation.

For manufacturers, the group recommended closer collaboration with government and more investment in skills, automation, innovation and digital manufacturing to lock in long‑term competitiveness.