The Pan-African Manufacturers Association (PAMA) has delivered one of its bluntest assessments yet of the continent’s industrial trajectory, warning in its March 2026 Manufacturing Review that Africa’s share of global Foreign Direct Investment (FDI) remains stuck between four and six per cent despite years of reform promises. The review arrives against a worrying backdrop: global FDI rose 14% to about $1.6 trillion in 2025, yet inflows to Africa collapsed 38% to just $59 billion, unwinding much of the 2024 spike that had been driven by a handful of mega-projects. PAMA argues that the continent is caught in a self-reinforcing cycle of “shallow industrialisation,” with capital consistently flowing into extractives and low-value-added services rather than the high-productivity manufacturing needed to transform economies, and is calling for a decisive shift from “generic openness” to a precision-led investment strategy built on policy certainty, regulatory discipline, and macroeconomic stability.
Key Overview
- Africa’s global FDI share: Stuck in a narrow band of 4% to 6%, with no durable breakout.
- 2025 inflows: Down 38% to $59 billion, even as global FDI rose 14% to $1.6 trillion.
- 2024 spike: A 75% jump to $97 billion was largely driven by Egypt’s Ras El-Hekma megaproject.
- Regional split: North Africa’s inflows fell 67% to $17 billion; sub-Saharan Africa eased 6% to $42 billion; South Africa recorded negative inflows due to divestment.
- Structural drag: Unreliable power, logistics bottlenecks, and a persistent skills mismatch continue to deter high-value FDI.
- The way forward: Full operationalisation of AfCFTA, strategic incentives tied to technology transfer and local value creation, and showcase value-chain projects such as the DRC–Zambia battery and EV zone.
Markets move fast; don’t get left behind. We’ve paired the Serrari Group Market Index with a curated Marketplace and a comprehensive Wealth Builder Platform to ensure you have the data—and the skills—to act on it.
A “Peripheral Position” in the Global Manufacturing System
PAMA’s latest Manufacturing Review opens with an uncomfortable finding for policymakers still leaning on pre-pandemic growth narratives: Africa’s share of global FDI has barely moved. The continent hovers between four and six per cent of worldwide inflows, a band so narrow that PAMA describes it as a “peripheral position” in global manufacturing systems. The verdict lands at a moment of deep volatility. After a 75% surge in 2024, inflows to Africa dropped 38% in 2025, falling to about $59 billion even as global FDI climbed 14% to roughly $1.6 trillion.
The association characterises the current investment climate as one of “extreme volatility and shallow industrialisation,” arguing that the 2024 spike to $97 billion was largely an artefact of isolated megaprojects rather than a fundamental deepening of industrial capacity. UN Trade and Development (UNCTAD) data backs up the concern: stripping out the Ras El-Hekma urban development deal on Egypt’s Mediterranean coast — a project led by Abu Dhabi Developmental Holding Company — Africa’s 2024 FDI rose a more modest 12% to about $62 billion. The reversal in 2025 shows how quickly the continent’s headline numbers can unravel when a single deal rolls off.
The Composition Problem: Where the Money Actually Goes
PAMA’s sharper concern is not the volume of FDI but its composition. The association argues that capital is “consistently funnelled into extractive industries and low-value-added services rather than the high-productivity manufacturing needed for long-term transformation.” Even within manufacturing, investment is largely confined to basic processing, agro-industry, and final-stage assembly — activities that generate jobs but rarely anchor the deep supply chains and technology spillovers associated with industrial upgrading.
The review warns that “the dominance of low-value-added activities has constrained the continent’s ability to achieve industrial upgrading, value chain integration, and large-scale employment generation.” That matches what global investment trackers are reporting. UNCTAD’s January 2026 Global Investment Trends Monitor found that investment in extractives and critical minerals fell sharply in 2025, with project values down 36% and critical-minerals projects down 63% year-on-year — an especially troubling signal for African economies that had hoped to leverage their resource endowments into downstream industries.
The pattern PAMA identifies is not just about where money goes, but what it does once it arrives. “Investors often adopt low-risk, low-complexity production models, reinforcing a pattern of shallow industrialisation,” the review states, leaving economies “vulnerable to external shocks and policy inconsistencies.” The rapid collapse of 2025’s headline inflows is exhibit A.
A Sharply Polarised Regional Map
Regional performance inside the continent remains deeply uneven. North African nations — Egypt, Morocco, and Tunisia in particular — have managed to leverage proximity to Europe into industrial clusters. In 2024, FDI in Morocco grew 55% to $1.6 billion and Tunisia’s inflows rose 21% to $936 million, with much of the capital anchoring automotive and textile hubs geared to European buyers.
But the picture darkened in 2025. North Africa’s inflows plunged 67% to $17 billion, while sub-Saharan Africa eased a more moderate 6% to around $42 billion. Egypt remained the continent’s top destination at roughly $11 billion, and Angola — long in negative territory — swung back to roughly $3 billion after nine years of net outflows.
The most striking contrast is in Southern Africa, where PAMA notes South Africa recorded negative FDI of around $6 billion on the back of capital withdrawals and divestment. That is not a blip; it reflects a broader pattern in which a handful of middle-income economies capture the lion’s share of what capital does arrive. UNCTAD’s COMESA Investment Report 2025 found that just five countries — Egypt, Ethiopia, Uganda, DRC, and Kenya — accounted for 90% of inflows to the COMESA bloc in 2024, even as the region’s overall share of global FDI doubled from 2% to 4%.
Context is everything. While you follow today’s updates, use the Serrari Group Market Index and Marketplace to spot emerging shifts. Need to sharpen your edge? Our Wealth Builder Platform turns these insights into a professional-grade strategy.
Structural Deficits: Power, Logistics, and Skills
Behind the concentration and volatility lies a familiar list of structural constraints. PAMA’s review identifies energy and technical-skills deficits as the primary anchors dragging down industrial FDI. “Unreliable electricity and logistics bottlenecks often result in production disruptions, relocation decisions, or reduced investment scale,” the association writes, while “the skills mismatch continues to constrain the attraction of higher-value, technology-intensive manufacturing FDI.”
These constraints are compounded by the external environment. PAMA’s March bulletin also warned that escalating geopolitical tensions — particularly the U.S.–Israel–Iran conflict that flared in late February 2026 — are driving up energy and shipping costs for African manufacturers. The association noted that rerouting of vessels around southern Africa, triggered by maritime security risks in Red Sea corridors, has raised both freight rates and delivery times for machinery and raw materials — taxes on industrial investment that rarely show up in headline FDI tables.
The digital picture is no more encouraging. UNCTAD reports that in 2024, sub-Saharan Africa attracted just $0.7 billion in greenfield digital projects, barely 5% of the $14.1 billion a year it needs to close its connectivity gap. Globally, digital-economy FDI has become the fastest-growing segment of cross-border capital — but ten countries captured 80% of new digital projects, leaving much of Africa on the outside of the very boom that is restructuring global industry.
From “Openness” to “Precision”
PAMA’s central policy argument is that the era of undifferentiated investment liberalisation has run its course. “Africa’s FDI strategy must shift from openness to precision, anchored on policy certainty, regulatory discipline, and macroeconomic stability as non-negotiables for investor confidence,” the review argues.
In practical terms, that means rethinking incentives. Rather than blanket tax holidays and low-conditionality packages, PAMA wants incentives that are “strategic, not generic, linked to performance, technology transfer, and local value creation, supported by world-class industrial infrastructure.” The framing mirrors UNCTAD’s own warning that multinationals are increasingly prioritising short-term risk management over long-term strategy, particularly in sectors sensitive to national security and supply-chain restructuring — conditions under which generic openness is unlikely to convert announcements into plants.
The association has been pushing the same line on trade policy. Earlier bulletins called on African governments to fast-track AfCFTA implementation with “urgency and industrial ambition,” arguing that intra-African trade and coordinated industrial policy are the only realistic routes to the scale required for globally competitive manufacturing.
AfCFTA and the “Proof of Concept” Projects
The March 2026 review concludes that operationalisation of the African Continental Free Trade Area remains the continent’s best hope for creating the “integrated markets enabling scale, cross-border value chains, and regional production networks” necessary to break the 6% ceiling. Full AfCFTA implementation would, in PAMA’s framing, do what no national investment code can: turn 54 fragmented markets into a single industrial platform capable of supporting deep supplier ecosystems and regional demand.
To make that abstract ambition concrete, PAMA is championing “deep integration” flagship projects. Chief among them is the DRC–Zambia Battery and Electric Vehicle value chain, a transboundary Special Economic Zone designed to process the region’s cobalt and copper locally rather than shipping raw ore to Asia. The plan — backed by a framework agreement with Afreximbank and the UN Economic Commission for Africa — aims to turn two of the world’s largest cobalt and copper producers into suppliers of battery precursors, cells, and eventually finished EVs.
The economic logic is compelling on paper. The DRC alone produces an estimated 67–70% of the world’s cobalt, while Zambia is the world’s eighth-largest copper producer. A BloombergNEF feasibility study estimated the total cost of the precursor project at around $2.7 billion, and found that a precursor facility in the DRC would be roughly three times cheaper to build than an equivalent plant in the United States. Yet the DRC currently exports roughly 97% of its cobalt unprocessed, mostly to China, which captures the bulk of the downstream value.
The project has attracted geopolitical attention: in December 2022, the United States signed a non-binding memorandum of understanding with DRC and Zambia at the U.S.–Africa Leaders’ Summit, and the European Union has concluded critical-mineral partnerships with both countries. But governance questions, financing gaps, and China’s existing dominance of cobalt processing remain significant hurdles to PAMA’s vision of a “proof of concept” for precision industrialisation.
The SEZ Turn
Alongside the DRC–Zambia initiative, PAMA points to a broader continent-wide shift toward Special Economic Zones as a pragmatic response to the structural deficits that deter investors. Zones in Ethiopia and Morocco, in particular, have been used to insulate manufacturers from broader infrastructure problems, providing reliable power, streamlined customs, and predictable regulation inside geographically limited enclaves.
The approach is not without critics. Economists have long debated whether SEZs genuinely catalyse broader industrial development or simply relocate existing activity. But the 2024 UNCTAD data suggests they are absorbing a disproportionate share of the greenfield capital that does reach the continent. COMESA countries alone attracted $77 billion in announced greenfield projects in 2024, two-thirds of Africa’s total, with construction and energy the dominant sectors.
For PAMA, the SEZ turn is less a silver bullet than a stopgap — a way to buy time while the larger reforms on power generation, transport corridors, and technical education begin to bite.
The Stakes for 2026 and Beyond
The numbers in the March review are more than an accounting exercise. Africa is entering a period in which global capital is rapidly reconcentrating around data centres, semiconductors, and advanced manufacturing in rich-country hubs. UNCTAD’s January 2026 monitor warned that FDI to lower-income countries fell 5% to $159 billion in 2025, with most sectors registering lower investment except data centres, which saw a 44% jump. If the continent remains locked in low-complexity production, it risks being left further behind as the frontier moves.
PAMA’s message is that the 4–6% corridor is not destiny. But escaping it will require a sharper focus than the generic openness of the past two decades — incentives tied to performance, zones built around genuine competitive advantages, and a continental market that functions like one. The March 2026 Manufacturing Review is, in effect, a challenge: either the continent gets precise about what it wants from foreign capital and builds the institutions to deliver it, or it accepts a peripheral role in the industrial economy of the next decade.
Your financial future isn’t something you wait for—it’s something you build.
The real question is: when do you begin?
Move beyond simply staying informed.
Navigate the markets with clarity—track trends through the Serrari Group Market Index, uncover opportunities in the Serrari Marketplace, and build practical knowledge with our Curated Wealth Builder Platform.
Stay connected to what truly matters.
Get daily insights on macro trends and financial movements across Kenya, Africa, and global markets—delivered through the Serrari Newsletter.
Growth opens doors.
Advance your career through professional programs including ACCA, HESI A2, ATI TEAS 7 , HESI EXIT , NCLEX – RN and NCLEX – PN, Financial Literacy!🌟—designed to move you forward with confidence.
See where money is flowing—clearly and in real time.
Track Money Market Funds, Treasury Bills, Treasury Bonds, Green Bonds, and Fixed Deposits, alongside global and African indexes, key economic indicators, and the evolving Crypto and stablecoin landscape—all within Serrari’s Market Index.
