Market News

The Pan-African Manufacturers Association (PAMA) has stated that while some African currencies, like Nigeria’s naira and Kenya’s shilling, have experienced stability in 2026, the fundamental mismatch between local-currency revenues and dollar, euro, and renminbi-priced inputs remains a significant issue.

The Association stated that recent perceptions of currency strength in Africa may suggest macroeconomic improvement; however, geopolitical risks and shifts in global liquidity continue to create vulnerabilities for manufacturers.

The April 2026 edition of PAMA’s News Bulletin highlighted that although some currencies have stabilised or appreciated, factors like shifting US monetary policy and commodity price fluctuations are primarily responsible. “In contrast, countries like Ghana face persistent pressure on their currencies, and many still deal with foreign exchange shortages,” it said.

The Bulletin emphasised that “African industries are exposed to a complex cost structure involving multiple currencies for various commodities, resulting in a mismatch between domestic revenues and multi-currency costs.

“Additionally, renewed geopolitical risk in the Middle East is affecting global energy markets, impacting both oil-exporting and oil-importing nations differently. The report further underscored “the return of geopolitical risks, particularly in the Middle East, which has reignited volatility in global energy markets. Fluctuations in oil prices remain acutely sensitive to conflict risks and uncertainties surrounding supply, with immediate ramifications for African economies. “For nations that rely on oil exports, surging prices can enhance foreign exchange earnings and bolster local currencies. In contrast, oil-importing countries frequently face the brunt of these shifts, as they experience rising energy costs that worsen trade balances and fuel inflation, exacerbating pressures on economies that are already thinly stretched.” According to PAMA, across much of Africa, the reliance on imported raw materials, machinery, spare parts, chemicals, packaging inputs, and advanced industrial technologies aggravates the situation; any movement in exchange rates directly impacts production costs. PAMA noted that “while the current relative currency stability may appear promising, it should be viewed as a temporary operational window rather than a sign of enduring stability. Future economic conditions will hinge less on prevailing exchange rates and more on the interplay of global financial situations, energy markets, and the trajectory of domestic reforms.” Despite a temporary period of currency stability, PAMA cautioned that this should not be viewed as a sign of lasting economic recovery, as many manufacturers remain heavily reliant on imported materials, keeping production costs vulnerable to exchange rate movements.