Global disruption can pave the way to improve supply chains in Africa

Port of Cape Town, South Africa (Image: WBHO)

This year's United Nations Annual Report on Economic Development in Africa highlighted the continent's potential to capture a wave of production shifting demand as businesses seek to diversify the way they transport goods around the world.

Rebeca Grynspan, Secretary General of the United Nations 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 supply chain disruptions around the world had "fuelled the need for companies to minimise exposure to global distress and reduce reliance on geographically concentrated suppliers and buyers”.

Although the report's content mainly focuses on Africa's vast mineral resources - including aluminum, cobalt and manganese - the report also recognizes the continent has many other untapped production potentials exploit properly.

African governments have certainly recognized these opportunities: Morocco is seeking to develop into a country with a foothold in the automotive sector, with a commitment to manufacture one million units per year by 2025. After the authorities launched the initiative on this orientation, the number of vehicles produced by the North African country has reached 700,000 units by 2022.

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

James Hookham, Director of the Global Shippers Forum told The Loadstar that tapping into Africa's export potential will require "a joined-up approach" based on technical skills and facilities available, tailored to the needs of customers around the globe.

For African SMEs, he said, the report was quite positive, positioning them as a "strategic source" for diversification and supply chain transformation, if they receive proper guidance.

With the aim of strengthening cooperation with governments and stakeholders in Africa, UNCTAD says it can help develop its own training program to support industry leaders and SMEs understand the opportunity to join the global supply chain through increased access to technology, finance and re-skilling programs.

Oulimata Sarr, Senegal's minister of economy, planning and cooperation, said the disruption to the global economy made Africa an obvious choice for businesses to consider adjusting their supply chains.

She added: “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”.

Source: Phaata.com (According to The Loadstar)

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