Manufacturers across Africa have raised concerns over escalating energy costs, warning that continued pressure on production expenses could weaken industrial output and trigger widespread economic consequences.
The Secretary of the Pan-African Manufacturers Association, Segun Ajayi-Kadir, said the situation is becoming increasingly critical as most industries depend heavily on petroleum products for electricity generation, logistics, and packaging materials.
He noted that the surge in energy prices has significantly increased production costs, leading to higher prices of industrial goods and weakening consumer demand.
According to him, if the trend continues, consumers may eventually reach a limit where they can no longer afford goods, leaving manufacturers with unsold inventory and exposing some industries to collapse.
Ajayi-Kadir explained that disruptions in global shipping routes have further worsened the situation by increasing import costs and delaying the delivery of raw materials, machinery, and intermediate goods needed for production.
He also highlighted the link between rising global oil prices and currency depreciation, noting that higher crude oil prices increase demand for the U.S. dollar, weakening African currencies and further raising import costs.
He warned that the ongoing instability could also affect the agricultural value chain, particularly through disruptions in fertilizer supply, which would increase food production costs and strain 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,” he said.
Ajayi-Kadir called on African governments to prioritise industrial resilience by developing domestic refineries and strategic oil reserves to reduce exposure to external shocks.
He stressed the need for stronger backward integration, regional manufacturing networks, and improved local value chains to reduce dependence on imported inputs.
He also urged governments and private sector stakeholders to invest more in renewable energy, gas infrastructure, and regional power integration to ensure stable and affordable energy for industries.
In addition, he recommended expanding local production of fertilizers, petrochemicals, steel, and industrial chemicals to reduce vulnerability to global supply disruptions.
Ajayi-Kadir further emphasised the importance of improving transport infrastructure, including ports and logistics systems, to reduce trade costs and enhance competitiveness.
He concluded by urging stronger patronage of locally made products, saying this would help stabilise industrial production amid global economic pressures.
