African Manufacturers urged to be ESG compliance to strengthen competitiveness in global economy
In boardrooms across Africa, a quiet revolution is unfolding. Environmental, social, and governance (ESG) compliance is fast becoming a strategic imperative rather than a peripheral concern. Companies are embracing sustainable production practices—not only to reduce carbon footprints and improve resource efficiency, but also to strengthen competitiveness in a global economy where “green credentials” now, matter as much as cost and quality, writes the Editor Gentechnews, Tony Nwakaegho.
African manufacturers are increasingly rethinking operations through an Environmental, social, and governance (ESG) lens as its compliance is fast becoming a strategic imperative rather than a peripheral concern from renewable energy adoption in textile and agroprocessing plants to waste recycling in packaging industries and water-efficient technologies in food and beverage processing, according to the Pan- Africa Manufacturers Association (PAMA) September 2025 News Bulletin.
Currently, certification schemes such as ISO 14001 (environmental management), Fairtrade, Forest Stewardship Council (FSC), and Global Reporting Initiative (GRI) frameworks are gaining traction, with more firms voluntarily adopting them to attract international buyers, investors, and development financiers.
It noted that sustainability has become both a shield against reputational risks and a lever for accessing new markets, while for export-oriented manufacturers in particular, ESG compliance is no longer optional but a ticket to entry into lucrative supply chains.
It highlighted that global buyers, particularly from Europe and North America, are raising the bar on sourcing requirements, while corporate commitments to carbon neutrality, ethical labour practices, and transparent supply chains are filtering down to suppliers in Africa as large retailers, automotive companies, and fast-moving consumer goods (FMCG) giants now require their African partners to demonstrate ESG compliance as part of contractual obligations.
PAMA cited the “Textiles and apparel: Buyers increasingly demand organic cotton sourcing, traceable supply chains, and compliance with labour standards such as those set by the International Labour Organization (ILO).
“Agro-processing: European supermarkets sourcing cocoa, coffee, and palm oil are pushing for Rainforest Alliance and Fairtrade certifications to ensure ethical farming and deforestation-free value chains.
“Extractives-to-manufacturing linkages: Automotive and electronics companies sourcing battery materials require African producers to prove responsible mining and processing practices, free from child labour and environmental degradation.
Accordingly, it stated that this “buyer-driven compliance” is transforming local standards as governments and industry associations are responding by embedding sustainability in national quality infrastructure, offering incentives for certification, and building ESG capacity among small and medium enterprises (SMEs).
“The ripple effect is the emergence of a greener manufacturing base—one aligned with global market shifts,” it added.
For African manufacturers, ESG compliance is more than a regulatory burden—it is the new gold as firms that lead on sustainability are better positioned to: Secure long-term contracts with global buyers; Attract green financing and ESG-focused investment funds; Access preferential trade opportunities under frameworks such as the EU’s Carbon Border Adjustment Mechanism (CBAM) and the African Continental Free Trade Area (AfCFTA); Build brand credibility with environmentally and socially conscious consumers.
In essence, the association noted that compliance is becoming competitiveness, as ESG moves from the margins to the mainstream, African manufacturing has an opportunity to leapfrog into a future where green growth is not only good for the planet but also good for business.
PAMA recommends to governments and development institutions that Governments must integrate ESG requirements into national quality
standards, trade strategies, and industrialisation policies, adding that without clear policy alignment, African firms risk being left behind in global supply chains.
It urges support for SMIs with capacity and incentives, noting that SMEs face the steepest barriers in adopting certifications and reporting standards.
PAMA urges governments, DFIs, and industry associations to subsidise certification costs, provide ESG toolkits, and build technical capacity to ensure SMEs are not excluded.
The body also mulled that financial institutions should create tailored products (green loans, ESG-linked guarantees, blended finance) to help manufacturers fund renewable energy, cleaner technologies, and compliance upgrades.
PAMA calls for regional harmonisation of ESG standards under AfCFTA to reduce duplication, cut compliance costs, and create a unified continental standard attractive to global buyers.
The Association called for collaboration between governments, industry associations, and multinational buyers is crucial, noting that shared ESG roadmaps and sector-specific compliance frameworks will reduce uncertainty for African manufacturers.
PAMA advises industry leaders to see ESG as opportunity, not burden and treat compliance as an investment in competitiveness rather than a cost of regulation, adding “Be Proactive: Do not wait for buyers or regulators to impose ESG requirements; adopt certifications and sustainable practices ahead of time to gain first-mover advantage.
“Invest in Transparency: Build credible reporting systems — transparency is increasingly the currency of trust in global markets.
“Collaborate for Scale: Pool resources across clusters, associations, and cooperatives to achieve certifications and access green finance more efficiently,”