Supply chain optimization Africa
Africa is huge in size, with in total over 50 countries, but domestic infrastructure in most countries as well as the infrastructure between individual countries can be far from optimal.
African countries understand and have started to significantly invest in infrastructure.
There are many reports stating that Africa could well be a future centre for high-tech industries and a key link in global supply chains. Some reasons behind this are its rich natural resources and growing consumer demand. An interesting development is the creation of an African single market, the African Continental Free Trade Area (AfCFTA). Officially launched in 2021, it will create the world’s biggest free trade area, home to more than 1.5 billion people when implemented (and expected to grow to 2.5 billion by 2050, accounting for 25% of the global population).
Given the sheer size of the continent and the distances between key markets, it makes sense to consider the optimal supply chain infrastructure for your products.
From having a central hub to having several warehouses at strategic locations or having stock in each market where you are active, especially when the time to market should be short or the transportation costs are relatively high to the product value.
Besides the physical product, there are other risks to manage when looking at your African supply chain. For instance, financial risks when local currencies decline rapidly, and your local partners might face difficulties to pay outstanding invoices. Another example are changes in import requirements and related documents in specific countries. This could delay the importation process and lead to unavailability of your products in the market.
