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By Merit Ibe
The Pan African Manufacturers Association (PAMA) has said Africa’s current commodity market conditions present a strategic opportunity to strengthen industrial resilience and enhance manufacturing competitiveness, despite ongoing global economic volatility.
Speaking on the outlook for 2026 and beyond, PAMA President, Ahmed, said Africa must convert shifting global commodity trends into long-term advantages through smarter procurement systems, diversified energy sources, stronger regional value chains and better-coordinated industrial policies.
According to him, easing fuel and freight costs are providing short-term relief for manufacturers, while the continued volatility in metals and cocoa prices is still putting pressure on production margins. He noted that although falling sugar prices offer some respite for food and beverage producers, many industries remain exposed to unstable commodity movements.
Ahmed stressed that Africa must accelerate its green transition while meeting rising industrial demand. He said the continent’s vast solar resources and falling renewable energy costs make it imperative for governments and businesses to scale up solar and wind projects, including rooftop systems, hybrid grid-plus-storage plants and other distributed solutions.
He added that governments should support this shift by simplifying grid interconnection rules and guaranteeing wheeling access for independent power producers, in order to improve energy availability for factories.
On energy and industrial policy, Ahmed said Africa must be deliberate in expanding both grid and off-grid power solutions and aligning energy markets with industrial development goals. He noted that reliable and affordable power remains the single most important factor in enabling African manufacturers to compete globally.
Commenting on oil and gas, the former president of the Manufacturers Association of Nigeria (MAN) said moderate global prices offer manufacturers a short-term chance to rebuild margins.
He advised manufacturers to explore long-term fuel contracts, invest in renewable micro-grids and negotiate local-currency power purchase agreements to ensure predictable energy costs.
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On metals and raw materials, Ahmed said copper prices remain above $10,000 per tonne due to global electrification trends, while iron ore trades near $100 and aluminium has softened to about $2,850 per tonne. These movements, he said, directly affect producers of steel, electrical equipment and construction materials.
To manage these risks, he urged companies to diversify sourcing, maintain strategic inventories and use forward-purchasing or hedging where possible. He also said regional recycling and processing hubs under the AfCFTA could reduce import dependence and exposure to foreign exchange fluctuations.
In the food and beverage sector, Ahmed noted that agricultural commodities show mixed trends. Wheat and palm oil remain volatile due to weather risks, cocoa prices are still above $6,000 per tonne, squeezing confectionery margins, while sugar prices have dropped, offering temporary relief to beverage and bakery producers.
He advised processors to adopt formula-based procurement linked to commodity indices, stagger their purchases to reduce price shocks and invest in local cocoa processing to retain more value within Africa. He also suggested that sugar mills should develop flexibility to switch between sugar and ethanol production depending on market conditions, with government support for small farmers.
On trade and logistics, Ahmed said the Baltic Dry Index below 2,000 points reflects lower shipping costs for bulk imports such as steel, cement and grains. However, he said African governments must fast-track port digitalisation, customs automation and transport corridor upgrades to ensure these savings are reflected in local prices.
He added that regional procurement pools under the AfCFTA could further cut logistics costs and improve supply security.
Addressing small and informal manufacturers, Ahmed warned that they remain the most vulnerable to commodity and currency volatility because they often lack access to hedging tools and affordable credit. He called on industry groups and development banks to establish pooled procurement platforms, working-capital facilities linked to commodity cycles and basic risk-management training.
On policy coordination, he said commodity volatility underscores the need to align industrial, trade and energy policies across the continent. He urged governments to support regional commodity exchanges, improve access to forward contracts and integrate power-sector reforms with industrial strategies.
According to him, coordinated regional action will ensure that global price moderation translates into stronger domestic industries, greater competitiveness and more inclusive economic growth across Africa.
