Unlock Africa’s Supply Chain Opportunities: Invest In Infrastructure, Technology And Financing
By Cyber Era NG Special Correspondent
Africa needs significant investment in infrastructure to bolster its position as a supply chain destination.
Seventeen African countries, including Angola, Botswana, Ghana and South Africa, have already implemented local content regulations to support the growth of local supply chains, foster technology transfer, create jobs and add value within their borders.
Additionally, African countries should also secure better mining contracts and exploration licences for metals used in high-tech products and supply chains. This would strengthen domestic industries, enabling local firms to design, procure, manufacture and supply the necessary components.
The adoption of innovative digital technologies is also critical to optimizing supply chain processes. Countries such as Kenya have made notable progress in this realm, with rising rates of digital skills adoption in Africa.
UNCTAD urges governments to create sound policies, foster an enabling regulatory environment and scale up programmes to promote the widespread adoption of these technologies.
The UN trade and development body also reiterates its call for better financing solutions to offer African countries and businesses affordable capital and liquidity to invest in strengthening their supply chains.
More supply chain finance for small businesses
The report says African small and medium-sized enterprises need more supply chain finance, which bridges the payment time gap between buyers and sellers, improves access to working capital and reduces financial strain.
According to the report, the value of the African supply chain finance market rose by 40 per cent between 2021 and 2022, reaching US$41 billion. But this is not enough.
The continent can mobilize more funds by removing barriers to supply chain finance, including regulatory challenges, high-risk perception, and insufficient credit information.
UNCTAD also underlines the need for debt relief to offer African countries fiscal space to invest in strengthening their supply chains, as on average they pay four times more for borrowing than the United States and eight times more than European economies.
