Manufacturers across Africa have raised alarm over surging energy costs, warning that the trend is driving up production expenses, weakening consumer demand, and increasing the risk of unsold goods and potential industry collapse.

The Pan-African Manufacturers Association (PAMA) said the sharp rise in energy prices—largely linked to global oil market volatility and geopolitical tensions—is placing severe strain on the continent’s industrial base.

According to the association, many African manufacturers depend heavily on diesel, petrol, and gas to power operations due to unreliable national grids. As energy costs climb, factories are forced to spend significantly more on production, leading to higher prices for finished goods.

This increase in prices is, however, dampening consumer purchasing power. With inflation already affecting households across several economies, demand for manufactured goods has weakened, leaving companies with growing inventories of unsold products.

Industry experts warn that if the situation persists, it could trigger a cycle of declining sales, reduced production, and eventual factory shutdowns—particularly among small and medium-sized enterprises with limited financial resilience.

The crisis has also been compounded by disruptions in global supply chains, which have increased the cost of importing raw materials and machinery. Manufacturers say delays in shipments and rising freight costs are further squeezing profit margins and affecting production timelines.

In addition, the depreciation of many African currencies against the U.S. dollar has made imports more expensive, intensifying cost pressures across key sectors such as food processing, chemicals, and textiles.

PAMA cautioned that Africa’s manufacturing sector remains highly vulnerable to external shocks due to its reliance on imported energy and industrial inputs.

The association warned that without urgent intervention, the continent could face a broader industrial slowdown with implications for employment and economic growth.

To address the challenges, manufacturers are calling on governments to implement structural reforms, including investment in local refining capacity, expansion of renewable energy sources, and improved infrastructure to support industrial activities.

They also urged policymakers to strengthen regional value chains and reduce dependence on imports by promoting local production of critical industrial inputs.