Insecurity threatens growth, survival of manufacturing in Africa

The Pan-African Manufacturers Association (PAMA) said rising insecurity continues to pose a major threat to the growth and survival of the manufacturing sector and dampens investor confidence.

This was contained in the association’s monthly report titled, ‘The shadow of insecurity: A threat to Africa’s manufacturing sector’.It noted that beyond economic challenges, insecurity remains a formidable threat to Africa’s industrial progress and continues to cripple manufacturing.

“Violent insurgencies, armed conflicts and political instability slash industrial output and diminish investor confidence. In the DRC, M23 rebel activities disrupt mineral processing, a sector vital to global tech supply chains. Insecurity in many African regions poses a significant threat to the manufacturing sector, leading to displacement, production losses and investor uncertainty, which have the potential to derail the continent’s industry,” the report said.
Noting that in the North East, the insurgency has displaced over 2.3 million people, the report said violence has led to significant production distortions in local manufacturing hubs.

“The International Crisis Group (ICG) estimates that Boko Haram’s activities have cost Nigeria billions of dollars over the past decade, as factories shut down and skilled labour flees the affected region.

“Compounded by the activities of other notable terrorist groups such as the Islamic State West Africa Province (ISWAP) and Ansaru, which emerged as a splinter group from Boko Haram and have been responsible for numerous attacks, kidnappings and destabilising activities have targeted government installations and economic infrastructure, further exacerbating the region’s insecurity,” it stated.

It said these persistent instabilities have eroded investor confidence, threatened long-term industrial development and hampered economic growth across Nigeria.

“According to reports from the ISS African Futures and Innovation platform, businesses in North Eastern Nigeria have faced closures and reduced operations due to continuous attacks, resulting in a significant drop in manufacturing output. Similarly, the World Bank also highlights that such insecurity and conflicts contribute to a slow investment growth rate in the region, which is projected at only 3 per cent for Sub-Saharan Africa in 2024,” it noted.

It urging urgent and coordinated responses, including strengthening security institutions, rebuilding infrastructure and deploying financial safety nets for manufacturers to stabilise industrial hubs. It said the continent must take charge of its industrial destiny.

Also calling on Africans to “buy Africa, build Africa”, it said the resurgence of protectionist policies, epitomised by the U.S.’ ‘America First’ agenda and escalating global tariff wars, has exposed Africa’s overreliance on imported goods.

The dependence, it noted, risks turning African countries into a dumping ground for substandard products while stifling local industries.

“We must harmonise the AfCFTA trade policies while governments and industry players must champion policies that promote local production. By uniting homegrown solutions, leveraging AfCFTA and confronting insecurity head-on, we can transform today’s challenges into tomorrow’s opportunities,” it advised.