While
business may be slowing elsewhere, Africa is booming, with many supply chain
opportunities for the entrepreneurial investor who’s keen to meet distribution
needs in developing countries.
“Most
opportunities are in retail – think food and cellular - and public services,
since governments are the big spenders when it comes to service delivery,” says
Abré van Buuren, SAPICS member and
Training Manager for Imperial Health Sciences’ (IHS)
Africa Supply Chain Academy. “What’s needed now are innovative
solutions that will work well in the unique African context,” he adds. “It’s a
time for entrepreneurs - and for those who’re willing to work hard - the pay-off
will be big.”
Private
Public Partnerships
According
to van Buuren, an enormous opportunity exists for companies to partner with
governments on delivering public services. A particular area of interest is in
the distribution of medicines. “Major donors of ARV drugs and the like are
pushing governments to partner with the private sector in developing their
public health supply chains,” he says. “Their intention is to ensure that the
millions of dollars worth of medicines that are donated actually get to those
who need them most.”
In
Malawi, a local distributor (CML), which has
received much support from IHS and USAID,
has rapidly grown as it assists the government in distributing medicines. CML
has invested in its Routing and Scheduling system, its vehicle fleet, and hired
more staff members to cope with the growth.
“This
is evidence of the fact that if the correct private sector partner is engaged,
it can enable a speedy, successful implementation of supply chain
infrastructure, particularly where funding is available to enable rapid
deployment,” says van Buuren. He says this demonstrates the feasibility of governments
outsourcing the key supply chain functions like procurement, storage and
distribution.
“This
may be the only sustainable solution to provide better outcomes in low resource
settings where the national system may not have the resources to have the
capacity one finds in the private sector.”
Booming
economies
The
rapid growth of economies like Nigeria and Angola is resulting in a huge need
for supply chain infrastructure. “In Nigeria, for example, we’ve found that
just two organisations are looking after the distribution of pharmaceuticals.
The opportunities are clearly enormous!”
Van
Buuren notes that especially in countries that are growing rapidly because of
the discovery of oil, such as Angola, some industries being neglected. “It’s
like the country’s focus shifts to oil so other industries simply lag behind,
creating huge opportunities in these areas.”
In
Angola, just one central store is tasked with distributing medicines to the
entire country. “This means that opportunities exist for partnering with the
government on, for example, building regional medicine stores so that that
medicines can reach the smaller towns.”
Retail
According
to van Buuren, the cellular industry is growing extremely fast. “Demand is huge
and product needs to be distributed to outlying areas,” he says. Also, the
retail food industry appears to be a bit behind in several countries where one
retailer holds the monopoly. “In Rwanda, for example, there’s just one big
retailer and no healthy competition.”
Challenges
when doing business in Africa
Although
Africa is ripe with opportunity, it’s important to be aware of the challenges
of doing business. “One stumbling block is that in many countries, there is a
lot of politics in doing business – which is perhaps why business isn’t growing
at a faster rate in Africa,” he says. “It’s all about who you know and how you
approach them; so make sure that you learn the culture and how best to operate
in it.”
Whatever
the challenges, van Buuren says the need for innovative investment in Africa is
so big it’s worth exploring. “Africans are hungry for knowledge and change,
they want to work with people from other countries. These are people who do not
suffer from an ‘entitlement complex’ – they would do anything to gain skills and
knowledge, and therefore, make great investment partners.”
Africa is growing with a commensurate increase in the supply chain opportunities. The time is now.
