Africa suffers risks scenario with collapsing manufacturing sector, stifling domestic production

African for many decades, markets have been flooded with imported goods, ranging from electronics and textiles to other everyday consumer products, hence this dependence has created a convenient short-term solution to meet immediate needs as well as reliance that, in today’s fraught global trade environment, poses an existential threat to the continent’s industrial future, according to February edition of The Pan-African Manufacturers Association (PAMA) Monthly Bulletin.

Interestingly, PAMA noted that this continued reliance now comes at a dangerous crossroads when trade wars are beginning to intensify with the renewed “America First” policies under President Trump’s administration with escalating tariff wars between the United States of America and key global players like; China, Mexico, Canada, the EU, and even BRICS member nations.

“Consequently, it can’t be overemphasized that building a resilient manufacturing sector is not just an economic imperative; it’s a strategic necessity for Africa’s future. This is because, when African consumers choose locally made goods, they not only support their country’s economy but also drive innovation and quality improvements within their industries and in turn, achieve a strengthened manufacturing sector that can reduce vulnerability to external shocks and build a more competitive, self-sustaining economy that benefits all citizens.

“If African consumers and the public fail to prioritize the patronage of locally manufactured goods, the consequences could be severe and far-reaching. The persistence of heavy import reliance would not only stifle the development of Africa’s burgeoning manufacturing sector but could also undermine the continent’s long-term economic sovereignty and its ambitious integration agenda under the African Continental Free Trade Area (AfCFTA),” it emphasized.

However, recent reports from Reuters suggest that, “as global tariffs rise and supply chains become more unpredictable, African economies could face a twofold crisis. First, they risk being overrun by cheaper imports that could crowd out locally made goods, which is more intensive than earlier seen. Second, the resultant collapse of local manufacturing would lead to job losses, particularly among Africa’s rapidly growing youth population, a demographic that desperately needs sustainable employment opportunities.”

It highlighted that the risk is that there is every likelihood that these countries might turn Africa into a dumping ground for low-cost, substandard goods designed to evade steep tariffs, adding that such a scenario could decimate nascent local manufacturing sectors, stifle indigenous patronage, reduce profit margins for indigenous producers, plunge millions of young Africans into unemployment, and ultimately stifle the growth of domestic industries.

Consequently, it stated that this scenario poses a direct threat to one of AfCFTA’s central aims to boost intra-African trade by creating a thriving network of regional manufacturing and processing.

“It is important to state that without a vibrant local manufacturing base and prioritization of the patronage of Made-in-Africa products, African nations risk losing the opportunity to capture greater economic value from their abundant raw materials,” it added.

Pan-African Manufacturers Association (PAMA) is the voice of manufacturers in Africa and is at the forefront of promoting Africa’s industrial transformation under the African Union’s Agenda 2063. Inspired by the visionary leaders and industrial experts at the 2018 Intra-African Trade Fair in Cairo, PAMA was established as a Continental Business Membership Organization (BMO). It is a Pan-African platform midwife and recognized by the African Union Commission as the representative of manufacturers on the continent.

The core goal is to represent, protect, and promote the interests of all manufacturers in African countries through coherent advocacy and partnership with key strategic stakeholders and players in the manufacturing sector.

PAMA is led by Interim President, Engr Mansur Ahmed and Interim Co- Secretary, Segun Ajayi-Kadir mni.