Africa’s Manufacturing Sector Under Siege as Unrest Surges

African manufacturing sectors that have long touted as the engine for economic transformation faces a dire threat from persistent insecurity across the continent, a spate of insecurity which has been undermining local industrial production, stifling economic growth, and deepening unemployment among millions of young Africans.

According to the February edition of The Pan-African Manufacturers Association (PAMA) Monthly Bulletin, insecurity in some African regions poses a significant threat to Africa’s manufacturing sector leading to displacement, production losses, and investor uncertainty which have the potential to derail the continent’s industrial.

It cited the case study Nigeria where Boko Haram, ISWAP, and Ansaru impact in northeastern Nigeria, noting that the Boko Haram insurgency has displaced over 2.3 million people, according to the United Nations Office for the Coordination of Humanitarian Affairs (UN OCHA, 2020).

The Association pointed out that the violence has led to significant production distortions in local manufacturing hubs, adding that the International Crisis Group (ICG) estimates that Boko Haram’s activities have cost Nigeria billions of dollars over the past decade, as factories shutter and skilled labour flees the affected region.

“Compounded by the activities of other notable terrorist organizations in Nigeria, 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 destabilizing activities, particularly in northeastern Nigeria, and have targeted government installations and economic infrastructure, further exacerbating the region’s insecurity.

“These persistent instabilities have disrupted manufacturing activities, 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 northeastern 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% for Sub-Saharan Africa in 2024,” the PAMA Bulletin stated.

Another case study is that of Democratic Republic of the Congo and M23 Rebel Activities, where continued insecurities as a result of the resurgence of the activities of the M23 group since 2022 till date in the DRC have created an unstable environment that hampers industrial development.

As noted by various economic analyses, the DRC’s potential as a manufacturing hub is stifled by these insecurities, with many firms unable to operate effectively due to safety concerns and logistical challenges (ISS African Futures and Innovation platform), consequently making the country’s manufacturing sector remain underdeveloped, contributing only a small fraction to its GDP, which is exacerbated by the ongoing violence.

“Manufacturing facilities, many of which depend on the processing of locally mined minerals have suffered frequent interruptions due to security threats,” the analyses added.

Reuters (2024) reported that ongoing clashes involving M23 have led to a decline in local industrial output by approximately 15% in the region, adding that this instability has not only diminished production capacity but also deterred foreign direct investment (FDI) in the Democratic Republic of the Congo, which is crucial for technology transfer and industrial modernization.

It cited another case study on Sudan and South Sudan’s chronic instability and its economic toll, noting that South Sudan, the world’s youngest nation, has been mired in conflict almost since its independence in 2011.

According to the PAMA Bulletin, the country’s persistent insecurity marked by ethnic tensions, political rivalries, and competition over scarce resources continues to wreak havoc on its fragile economy and undermine prospects for industrial and economic development.

It stated further that despite several peace agreements, including the 2018 Revitalized Agreement on the Resolution of the Conflict in South Sudan (R-ARCSS), implementation has been fraught with delays and frequent violations.

According to a 2023 United Nations report, over 2.2 million people remain internally displaced, while millions more require urgent humanitarian assistance due to ongoing violence and economic collapse.

A study by the International Crisis Group (2022) estimated that the overall economic cost of conflict in South Sudan has pushed down industrial output by up to 20%, further deepening unemployment among the country’s largely youthful population.

Sudan on the other hand, it noted presents another stark example where insecurity has led to economic collapse, as the ongoing conflicts have led to severe inflation and shortages of essential goods, further crippling the manufacturing sector.

“As of late 2023, Sudan’s economy was characterized by rampant inflation rates exceeding 300%, making it nearly impossible for manufacturers to maintain operations or plan for future investments (McKinsey Insights). Even at present, it is as high as 145.14% as of February 2025. This economic instability directly correlates with increased insecurity, leading to a vicious cycle that stifles growth,” the PAMA Bulletin emphasized.

A recent World Bank report (2023) noted that “manufacturing capacity in several industrial centers has been reduced by as much as 20% due to continuous violence and political turmoil. The pervasive insecurity in Sudan disrupts manufacturing activities, increases production costs, and hampers efforts to modernize local industries, further straining an economy that is already struggling to diversify away from its traditional reliance on raw commodity exports.”

It cited 0ther African countries plagued by insecurity to include Mali, Somalia, Libya, and Ethiopia, where ongoing jihadist insurgencies, al-Shabaab activities, and civil conflicts have severely disrupted manufacturing, supply chains, and investment, particularly in key regions like Timbuktu, Mopti, and Tigray, further weakening industrial productivity and economic stability.

The Association highlighted that the cumulative impact of these insecurities is profound, adding “With large swathes of the continent’s manufacturing sector vulnerable to conflict-induced disruptions, Africa risks a scenario with a collapsing manufacturing sector that will not only stifle domestic production but that with a declined contribution to Africa’s contribution to global output.”

As a panacea to these spate of insecurity in these countries which not only diminishes manufacturing output but also perpetuates a cycle of economic vulnerability, PAMA proffered solution to counter these challenges and safeguard Africa’s industrial future and urged the policymakers and industry stakeholders to act decisively by:  “Strengthen local and regional security institutions, and increase support for peacebuilding initiatives. Improved security will help stabilize manufacturing hubs and restore investor confidence.

“Allocate resources to rebuild and upgrade critical infrastructure such as roads, power supply, and digital connectivity to ensure that manufacturing operations can resume uninterrupted and supply chains remain robust.

“Develop strategies that provide support to local manufacturers during periods of instability, including targeted financial instruments, insurance schemes, and emergency response plans to minimize the impact of conflict-related disruptions.”