Structural weaknesses in African supply chains, exposes decades of its vulnerabilities

The global commodity markets by November–early December 2025, painted a landscape of unease rather than crisis, however this was a landscape defined less by spectacular price surges than by complex cross-currents whose consequences fall disproportionately on African manufacturers, according to the Pan- Africa Manufacturers Association (PAMA) December 2025 news bulletin.

PAMA highlighted that across energy, metals, agriculture, and industrial inputs, volatility interacted with structural weaknesses in African supply chains, exposing vulnerabilities that have persisted for decades.

The energy markets, it stated illustrate this paradox sharply as Brent crude hovered around US$62 per barrel in late November 2025, reflecting expectations of a 2026 supply surplus and a broadly softening global macro environment. (Trading Economics, Nov 2025).

It stated further that diesel — the fuel critical for logistics, captive generators, and heat-intensive industrial processes — remained tight as Asian refiners, particularly in China, managed export volumes strategically, adding November shipments were constrained, even as December promised modest relief via expanded export quotas.

It clarified that African manufacturers, who import refined products rather than crude, global oil softness offers limited operational reprieve, while Cement, FMCG, agro processing, and logistics-intensive sectors must therefore treat diesel not as a commodity but as a strategic operational determinant.

It maintained that the immediate responses should include short-dated procurement cover, pooled consortia purchasing, and accelerated deployment of captive renewables.

On natural gas and LNG markets, it noted African economies reliant on imported gas, industrial heating, and LPG, saying that this translated into potential cost shocks.

Paradoxically, it stated that some gas-rich countries export at international prices while domestic industries face expensive, unreliable supply — a structural inversion that undermines industrial competitiveness.

 On petrochemicals and plastics markets, the news bulletin explained how polyethylene, polypropylene, and PVC prices fluctuated with refinery turnarounds and naphtha cracks rather than crude fundamentals.

On the other, it noted that African manufacturers in packaging, furniture, household goods, automotive components, and construction materials confronted margin pressures that are structural, not temporary, while regional polymer capacity — via naphtha crackers or gas-based derivatives — must become a continental priority if African industrialisation ambitions are to be credible.

The metals complex, the news bulletin, hinted offered further illustration of global structural imbalances, indicating that Copper traded near US$10,700/t, aluminium remained elevated due to high smelting costs, and nickel recovered modestly as Indonesia’s production moderation and EV demand tightened balances. Zinc and lead remained robust, influenced by construction cycles and battery

On the contrary, it stated that the African manufacturers — cable producers, transformers, machinery fabricators, and automotive assemblers — face acute cost exposure because domestic mineral processing remains underdeveloped.

“Without copper rod plants, aluminium rolling mills, and battery-material refining, Africa remains resource-rich yet industrially exposed,” it stated.

It emphasized that ferrous metals, particularly steel, reinforced these vulnerabilities due to global hot-rolled coil (HRC) prices which rose nearly 25% year-on-year in late November 2025 (Trading Economics, Nov 2025), driven by robust construction and machinery demand and constrained Chinese exports.

However, it noted that Rebar and other long products were less volatile globally, but African domestic prices frequently diverged due to logistics, currency depreciation, and scrap-market distortions, while HRC represents a choke point for African manufacturers of appliances, vehicles, storage tanks, and industrial equipment. Building flat-steel finishing and galvanising capacity is thus urgent.

Precious metals, it stated, led by gold, rallied on expectations of 2026 interest-rate cuts and a softer dollar, while Gold’s ascent is less about industrial demand or jewellery than about signaling macro-financial risk.

In African contexts, it correlates with FX volatility, increasing the local currency cost of imported machinery, chemicals, spares, and raw materials, hence manufacturers should treat gold rallies as operational risk indicators, not passive market phenomena.

According to the news bulletin, Agricultural commodities presented a quieter but nuanced picture, stressing that global supplies of wheat, maize, and soybeans were adequate, while edible oils such as palm and soybean oil moderated, yet logistical disruptions, port congestion, and currency fluctuations translated global stability into domestic volatility.

For African brewers, millers, confectioners, feed producers, and edible-oil refiners, it stated that the lesson is clear: invest in local agro-processing, contract farming, and storage infrastructure to shorten and stabilise supply chains.

The fertiliser complex — urea, ammonia, potash, DAP, it explained remained moderately volatile, sensitive to natural gas costs and shipping constraints, noting that fertiliser price movements feed directly into input costs for food processors, textile mills, and breweries.

 However, Gas- and phosphate-rich countries such as Nigeria, Morocco, and Tanzania face a strategic choice: integrate fertiliser production into domestic agro-industrial value chains or remain exporters of raw inputs.

By late 2025, it stated that global freight costs, reflected in the Baltic Dry Index (~2,260 points), have risen sharply due to tighter bulk shipping capacity, strong demand for ores, grains, and other commodities, and port/logistics bottlenecks, adding that for African manufacturers, this amplifies the landed cost of imported raw materials and intermediates, strains working capital, and erodes export competitiveness.

Looking ahead to early January 2026, it added that freight rates are expected to remain elevated as post-holiday restocking sustains demand, while limited vessel availability and ongoing supply chain congestion continue to pressure shipping costs, reinforcing the urgency for regional sourcing, local processing, and freight-risk management strategies.

Commenting on Battery and EV-related materials — lithium, cobalt, graphite, and rare earths — stabilized after the 2023–24 oversupply, adding that Lithium prices steadied as Chinese EV demand rebounded cobalt tightened modestly; rare earths remained strategically priced.

“These dynamics underscore Africa’s potential in the global energy transition: without domestic precursor processing and magnet-material refining, the continent risks deepening its role as a raw-material exporter rather than a value-added industrial hub,” it stated.

It recorded that even cement inputs — gypsum, clinker, limestone derivatives, and kiln coal — demonstrated late-2025 complexity, noting that Global coal prices cooled, yet African cement producers benefited little due to logistics constraints, currency depreciation, and security risks.

It affirmed that cement remains foundational to industrialisation, and its cost trajectory affects factories, warehouses, and industrial-zone development.

Finally, it stated that industrial gases — oxygen, nitrogen, argon, hydrogen — fluctuated with semi-conductor demand, medical consumption, and steel cycles, adding “Africa’s limited cryogenic and gas-processing capacity causes price shocks in welding, fabrication, pharmaceuticals, and high-precision manufacturing.”

All in all, it emphasized that the world is not in a commodity crisis, but Africa remains structurally vulnerable, stressing that “volatility is external; vulnerability is internal. Prices in some sectors are benign; in others, elevated. What makes them dangerous is Africa’s reliance on imported energy, metals, polymers, and food processing inputs; limited hedging culture; thin domestic processing capacity; high logistics costs; and fragile FX environments.”