Dollar Cycles and Middle East Tensions Put African Industries at Risk – Manufacturers Warn

African manufacturers are raising concerns that recent currency stability across parts of the continent may be misleading, as deeper structural risks continue to threaten industrial growth. The Pan-African Manufacturers Association (PAMA) says that while currencies such as Nigeria’s naira and Kenya’s shilling have shown relative stability in 2026, businesses are still struggling with the gap between local earnings and foreign currency costs.

According to PAMA’s April 2026 News Bulletin, the appearance of stronger African currencies is being influenced more by global economic conditions than by internal strength. Factors such as shifting United States monetary policy and fluctuations in global commodity prices are playing a major role in recent exchange rate movements across the continent.

The association also highlighted that African industries remain heavily exposed to multi-currency pressures. Manufacturers often earn revenue in local currencies but must pay for essential imports like raw materials, machinery, chemicals, and packaging in dollars, euros, or renminbi—creating a persistent cost imbalance that weakens competitiveness.

PAMA further warned that renewed geopolitical tensions in the Middle East are adding another layer of instability. Oil price volatility, driven by conflict risks and supply uncertainty, is affecting both exporting and importing African nations differently—boosting earnings for some while worsening inflation and trade deficits for others.

Despite short-term currency stability in several markets, the association cautioned that this should not be mistaken for long-term economic security. It stressed that Africa’s manufacturing future will depend less on current exchange rate trends and more on global financial conditions, energy market stability, and the pace of domestic economic reforms.

source: Leadership