Geopolitical tension expose fragility of Africa’s supply chains

Geopolitical tensions, shipping disruptions and energy insecurity are exposing vulnerabilities in Africa’s supply chains, leaving businesses increasingly vulnerable to rising costs, production delays and shortages. Experts who spoke at the second edition of the African Centre for Supply Chain (ACSC) conference themed, ‘From Fragility to Foresight: Securing Africa’s Supply Chains Amid Geopolitical Shifts,’ said that Africa’s heavy dependence on external suppliers, vulnerable transport corridors and inadequate regional production capacity exposed businesses to shocks capable of driving up costs, disrupting production and worsening inflation. Obiora Madu, director general, African Centre for Supply Chain (ACSC), said efficiency alone was no longer sufficient for businesses operating in an increasingly unpredictable global environment. Madu said that African businesses must move beyond traditional efficiency-driven supply chain models and invest in resilience, diversification and foresight to withstand growing geopolitical, energy and trade disruptions. Read also: Global supply shock drives urgency for Nigeria’s non-oil export push “Prior to now, everybody talks about efficiency, wanting to be efficient. Efficiency is not enough any longer because disruption will kill you completely,” he said. Madu said the COVID-19 pandemic demonstrated the danger of excessive dependence on a single sourcing market, particularly China, noting that companies were forced to reassess their supply arrangements after factory closures disrupted global production. He also identified energy costs as another major pressure on businesses, noting that companies were already increasingly turning to alternative energy solutions to keep their operations running. “Everybody is trying his own way. This resilient infrastructure can be people. It can be technology. It can be equipment to deal with energy,” Madu said. Read also: The Work That Outlives the Office: Kamoru Ogunlana and the Discipline of Institution Building He further called for greater utilisation of Nigeria’s rail and inland waterway systems to reduce pressure on roads and lower logistics costs. “We know that railway is the best for all,” he said, adding that Nigeria needed to think beyond a conventional transport policy towards a broader logistics framework covering transportation, warehousing and supply-chain activities. Frank Ojadi, professor in the department of operations management, Lagos Business School, said the ability of African economies to maintain production and distribution during global disruptions would increasingly determine their competitiveness. “The next competitive advantage for African economies will not simply be the ability to produce more. It will be the ability to continue producing, moving and delivering when the world at our loss is disrupted,” Ojadi said. He noted that COVID-19, the Russia-Ukraine war, shipping disruptions and changing trade policies had exposed weaknesses in supply chains built around low-cost sourcing, lean inventories and limited alternatives. Read also: Supply risks push global food prices higher for second month Ojadi urged African countries to develop regional supply networks under the African Continental Free Trade Area (AfCFTA), with countries specialising in different stages of production. He also advocated the use of artificial intelligence, predictive analytics, Internet of Things, satellite data and digital platforms to identify emerging risks before they become major disruptions. “Foresight does not mean predicting exactly what will happen. Foresight asks a different question: What will happen and what will we do if it happens?” Ojadi said. Stakeholders agreed that supply-chain resilience should not be treated merely as a defensive business strategy but as an opportunity to deepen African industrialisation, local production, employment and intra-African trade. Olasunkanmi Ojowuro, director, mechanical engineering, Lagos State ministry of transportation, said the resilience of Africa’s supply chains was closely tied to the strength of its transport infrastructure. He said geopolitical tensions, conflicts, shipping disruptions, energy insecurity and changing trade relationships could quickly translate into higher costs, shortages and delays for African businesses. “Resilience cannot be built after the crisis arrives. It must be engineered before the crisis,” Ojowuro said. He called for greater investment in roads, railways, waterways, ports, technology and data-driven transport systems, alongside diversification, local capacity development and regional integration. Join BusinessDay whatsapp Channel, to stay up to date Open In Whatsapp