News / Global disruption can open doors for improved African supply chains

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Supply chain diversification – kick-started by rumblings in China-US relations and exacerbated by the pandemic and Russia’s invasion of Ukraine – has presented an opportunity for Africa.

The UN’s annual Economic Development in Africa report this year highlights the potential for the continent to capture a wave of demand, as companies look to diversify the way they move goods around the world.

Rebeca Grynspan, secretary general of the UN Conference on Trade and Development (UNCTAD), said: “Many companies across the world are rethinking their supply chain strategies in order to address gaps and mitigate risks.”

She said recent disruption around the world had “fuelled the need for companies to minimise exposure to global distress and reduce reliance on geographically concentrated suppliers and buyers”.

While the report largely focuses on Africa’s vast mineral wealth – including its aluminium, cobalt, and manganese resources – it also suggests there is untapped manufacturing potential.

Certainly, Africa’s governments have recognised this: Morocco is looking to become a player in car-building, with a pledge to produce a million a year by 2025. It hit 700,000 last year, following the launch of a government initiative.

The report says: “Government initiatives are designed to enhance integration, scale industry, upgrade operations, improve tech and knowledge transfer, and diversify export markets.”

Global Shippers Forum director James Hookham told The Loadstar to exploit Africa’s export potential would require “a joined-up approach” that would be based on the skills and facilities there, in terms of their attractiveness to global customers.

For the continent’s SMEs, the report will go down well, positioning them, with the right help, as a “strategic source” of supply chain diversification and transformation, he said.

Offering to partner with governments and stakeholders, UNCTAD said it could help develop bespoke training to assist industry leaders and SMEs understand opportunities to integrate global supply chains through increased access to tech, financing and re-skilling programmes.

Senegal’s minister of economy, planning and cooperation, Oulimata Sarr, said the disruption to the global economy left Africa an obvious choice for relocating supply chains.

“Manufacture of electric vehicles and mobile telephones, which require a wide range of raw materials and intermediate inputs, can take advantage of the proximity of the market, and benefit from opportunities for added value and job creation,” she added.