“Building Back” Africa’s supply chain

“Building Back” Africa’s supply chain

For our second article in a series about women in the supply chain, WhyAfrica interviewed Azuka Okeke, CEO of the Africa Resource Centre for Excellence in Supply Chain Management in Nigeria about the opportunities, challenges, and outlook of supply chain management in Africa.

By Leon Louw, founder and editor of WhyAfrica

Azuka, how important is it to manage the supply chain effectively to ensure growth in Africa?

Africa has a young population that makes it one of the fastest growing economies in the world. However, for sustainable growth, Africa needs to diversify its economy by leveraging its advantages of a large consumer market and a young and entrepreneurial population. Logistics and supply chain management is at the nexus of these advantages.

For each of the major sectors of the African economy (agriculture, crude oil, food and beverage, automotive, mining and pharmaceuticals), the supply chain serves as a key enabler, with the power to have a multiplier effect on growth and sustainability.

With Covid-19, the supply chain inefficiencies and shortfalls have resulted in the underperformance of most of these industries with a decline in trade volumes and investments. This had a negative impact on economic growth across the continent.

These challenge, however, has resulted in a renewed drive to adopt  the African Continental Free Trade Area (AfCFTA) and to strengthen regional value chains and unlock market opportunities and business.

How can women become more involved in the different functions of the supply chain?

Organisations must prioritise supply chain diversity with an actionable agenda, intentionally upscaling resources to train women to take on more roles across the different supply chain functions. This should include instituting more mentorship and scholarship opportunities to bridge the gender gap.

There are not many women in manufacturing roles and an early introduction to these opportunities can make it easier in transitioning to corporate leadership positions.

Several organisations are actively promoting and advocating for young girls to be active in science, technology, engineering, and maths. For instance, Deloitte-sponsored initiative Girls Who Code, work to build interest in young girls prior to their entry to the corporate world. MIT Boston conducts roundtables, and other initiatives to encourage women to pursue supply chain careers.

My early exposure to the profession was vital to my growth and leadership as a woman in the supply chain public health practice.

What are the challenges for women in African countries and are these challenges being addressed?

One of the principal benefits of the growing supply chain industry in Africa, is the opportunity for direct and indirect employment. However, women often have less access to these opportunities.

Women in most African countries still face workplace and market opportunity discrimination. The cultural bias in girl child education often results in women in Africa lacking the necessary skills resources, social capital and/or rights to engage in emerging logistics and supply chain opportunities.

There are recent efforts by finance development sectors including the African Development Bank and the World Bank, that indicates that more women in Africa can access opportunities for SMEs. These are mostly grants or loans that not only increase their income base but also positions more women for financial independence, poverty reduction and social development.

How did Covid-19 impact the supply chain in Africa?

The global pandemic highlighted the heavy import dependency and vulnerability of Africa’s manufacturing sector. For instance, all African countries import close to 100% of their pharmaceuticals.

As the economic center of gravity of the world shifts towards emerging markets, the pandemic exposed the inability of the continent to become a significant hub for global trade.

Well-functioning supply chains are critical to the long-term competitive and financial success of companies in Africa particularly with the goal of becoming regional/global players. Weaknesses in policy and operational systems also affected global multinationals who want to succeed in the African market.

Several companies in the continent clearly lack expertise in supply chain management and could not manage the decision making required to redesign and restructure their supply chains to address rapidly varying demands and challenges in meeting client needs.

Hence it is still taking the continent time to stabilise the macroeconomic environment. With high dependency on importation and global supply chains the continent could not react effectively to reduce the cost of doing business in addition to unlocking new avenues for revenue generation through the speedy expansion of local manufacturing.

Many countries in Africa face a collapse of the agribusinesses yet to identify efficient ways of collaborating regionally (intra Africa) to reach bigger/further markets within the continent to foster increases in the exportability of mass-produced crops.

Pharmaceutical supplies across Africa are being affected by export restrictions imposed by other countries and lower access to medicine supplies because of shutdowns of manufacturing facilities in China and India, as well as increased prices of raw materials.

How can we make sure that the supply chain operates smoothly, effectively, and that it is sustainable in the future?

Africa should look inward and review existing supply-chain strategies to strengthen domestic operations to mitigate the risks of external disruptions. Governments should put in place processes that will ensure resilience in the face of future disruptions to global supply and industry value-chains. Government incentives and policy changes that promote local business expansions should be instituted across the continent.

As we resort to regional and domestic diversification, African countries should improve the infrastructure required for more efficient intra-regional supply chains. Localisation of businesses does not mean that the continent should drastically reduce imports as the region’s long-term economic growth depends on the seamless inflows of goods, technology and capital from the rest of the world.

What problems do African countries still encounter in terms of supply chain management?

Government policies have a significant impact on the development of the supply chain industry. The current policies that promote local production and businesses are inadequate to address customer needs throughout the continent, reducing the output of the economy as a whole.

Many countries have inadequate transport network infrastructure in addition to the shortages of long-haul drivers and trucking capacity. As a result, movement of goods is not efficient and is marked by high transport costs, unreliable delivery times and loss of goods.

Supply chain industries globally have embraced disruptive emerging technologies like artificial intelligence, advanced analytics, the internet of things and conversational systems. Most of these technologies have not been fully adopted in the supply chain industry in Africa. We still experience long lead time when purchasing raw materials and other commodities from the international market mostly due to low adoption of technology for logistics and port activities, among others coupled with the lack of diversification of port network infrastructure.

The African supply chain industry remains relatively manual-based and static, and lagging behind their peers across the globe.

How will the African Free Trade Agreement impact supply chains in Africa and what opportunities will it open-up for especially women in Africa?

AfCFTA aims to facilitate cross-border cooperation within the continent and it comes at a time when much of the world is turning away from cooperation and free trade. If implemented appropriately the pact will reduce all trade costs and enable Africa to integrate further into global supply chains – it will eliminate 90% of tariffs, focus on outstanding non-tariff barriers. The agreement should simplify customs procedures in addition, beyond trade, address the seamless movement of labor and investment.

Currently, only 17% of African exports are intra-continental making the pact a critical enabler for economic transformation across Africa. The AfCFTA is prioritising women empowerment.  According to the Economic Commission for Africa, women account for about 70% of informal cross- border traders in Africa. Tariff reductions will enable informal women traders to operate through formal channels, reducing the exposures to harm and vulnerabilities through informal cross-border trade, bringing better protection.

What is the outlook for Africa, and women in Africa, over the next five years or so?

The African Development Bank Group’s African Economic Outlook (AEO) 2020 Supplement estimates that Africa could suffer GDP losses in 2020 between USD145.5-billion (baseline) and USD189.7-billion (worst case), from the pre-Covid–19 GDP estimates. To recover countries, need to adopt ‘build back’ strategies such as presented by AfCFTA to cushion the effects of the pandemic.

In the longer-term, there is need for a system-wide approach to increase the continent’s resilience to future shocks. This will include the need to diversifying exports to accelerate in-country economic growth, competitively integrating into the global economy, increasing foreign direct investment, increasing employment opportunities and incomes.

According to Mo Ibrahim Foundation, if African countries successfully implement the AfCFTA , this could generate a combined consumer and business spending of USD6.7-trillion by 2030. This will help reshape markets and economies across the region, leading to the creation of new industries and the expansion of key sectors making African countries more competitive globally.

With regards to women in Africa according to the AfCFTA Secretary-General Wamkele Mene, the AfCFTA will be the opportunity to close the gender income gap, and the opportunity for SMEs to access new markets.

Many platforms have been set up both in Africa and beyond the region, to promote and making visible, women leadership in supply chain management. This innovative approach will scale the adoption of the profession by more women in the continent thereby further bridging the gender gap.

Azuka is the CEO of ARC_ESM. She oversees supply chain transformation projects in Nigeria and has also supported other African countries in strengthening their health systems. She is best known for her expertise in engaging governments and development partners, supporting them to prioritise and invest in health supply chain programmes in Africa.

Her work has improved financial investments by the Federal and State governments in Nigeria and co-investments worth over USD8,000,000 (Eight Million US Dollars) from the Bill and Melinda Gates Foundation, The Global Fund, and GAVI.

Azuka is well known for the role she plays as a thought partner and advisor to national ministries of health in Africa. Beyond government engagements, she has successfully facilitated Public-Private Partnerships for innovative health financing through platforms such as the World Economic Forum and recently ARC.

Currently, she has pioneered the set-up of a first of its kind membership platform for the private sector in Nigeria through which private corporates and individual experts have contributed about USD700,000 (Seven Hundred Thousand US Dollars) to public health programmes within the past four years.

Her ambition is to provide governments and partners with a pragmatic framework for sustainability and country ownership for supply chain delivery. Her most recent aspiration is in advocating for human capital development in Africa and championing a collaboration with MIT Boston, Zaragoza Logistics Centre, Spain, and six local universities in Nigeria to set-up a Pan-African Centre of Excellence for Supply Chain Management.

“Building Back” Africa’s supply chain

By Leon Louw.

Leon Louw is the founder and editor of WhyAfrica. He specialises in natural resources and African affairs.        

WhyAfrica provides you with business intelligence that matters. Africa is our business, and we want it to be yours too. To subscribe to WhyAfrica’s free newsletter or digital magazine, and for more news on Africa, visit the website at www.whyafrica.co.za or send a direct message. WhyAfrica will launch its first ever digital magazine in November. If you are interested in contributing or advertising, please contact me at leon@whyafrica.co.za. To coincide with the first launch, we have a range of different packages and combo deals to give your company the greatest exposure to a rapidly growing, African readership.

 “Building Back” Africa’s supply chain

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