Pandemic Accelerates Supply-Chain Innovation In Africa

September 18, 2023
5 min read

COVID-19 Impact and Supply Chain Innovation in Africa:

–- The COVID-19 pandemic led to movement restrictions that adversely affected businesses throughout 2020. However, innovation in the supply chain emerged as a silver lining for retailers, according to the International Finance Corporation (IFC) report, E-Conomy Africa 2020.

–- E-Logistics companies implemented creative solutions in response to the pandemic, leading to anticipated rapid growth post-COVID-19. Sectors like agriculture, manufacturing, and basic goods were recognized as critical supply chains.

–- Supply chain challenges, such as poor infrastructure and limited access to financial services, have long plagued Africa's trade scene. The IFC sees the rise of supply chain management platforms as a solution to transform the informal business sector and reduce the cost of trade.

–- Inefficiencies in the supply chain contribute to increased costs. For example, transportation accounts for a significant portion of product costs in Africa, often reaching up to 60%. Amitruck, an e-logistics platform, utilizes big data analytics and IoT networks to address these inefficiencies and supports supply chain companies like Twiga Foods.

–- Copia Global, a Kenya-based supply chain technology company, offers a platform that enables customers to select goods for delivery across the country. By engaging transport trucks and eliminating middlemen, Copia ensures a more direct supply of products to consumers.

–- Other supply chain platforms, such as Chari in Morocco and Zaidi Technologies in Kenya, are successfully delivering FMCG and dairy products, respectively, to small retailers. These platforms offer efficient ordering processes, market access, and value addition to farmers' produce.

–- Access to financing is a major challenge for small retailers in Africa's informal sector. Zanifu, a Kenyan company, addresses both the supply and financing needs of small traders by providing credit facilities and streamlining business processes.

–- The digitization of supply chain components, including financing, distribution, and sales, shows promise in Africa. These innovations enable small-scale farming and community shops to engage in different marketplaces, contributing to economic growth. As digital platforms mature, this trend is expected to continue expanding.