The difficulties of African supply chains

Supply chain problems in Africa are quite complex, with most of them stemming from the sheer size of the continent. Africa’s land mass is greater than the USA, Europe, and China combined. Within this huge space there are 54 unique markets, few of which provide scale or adequate distribution infrastructure. Further complicating matters, there are over 2,000 languages spoken and very diverse cultural dynamics from one market to the next.

That is from an article by Chuma Asuzu, the piece is interesting throughout, most of all for infrastructure supply chain nerds.  I so, so wish there were more articles like this.

For the pointer I thank Omar Mohamed.  Omar also recommends this site on manufacturing.

Comments

First thought was what an interesting overview. Second thought is that China is working on Africa supply chains diligently. Third thought was that Brexit is a great way to remove oneself from existing supply chains.

'is that China is working on Africa supply chains diligently'

Along with diligently supplying the African market, as highlighted by the quality of the picture seen in the recent Yonas post, taken with a Chinese manufactured camera phone that cost around $80, from a company that only sells to the African market.

I ⅾo not know if it's juszt me օr іf perhaps everyone else encountering issues
ԝith your site. It appears as though ѕome of the text within your posts are
running off the screen. Can someone else pleasе comment aand let mme know if this
is haⲣpening to tthem too? This could be a problem with my
browseг because I've hadd tis happen before. Thanks

It'ѕ awesome for me to have a site, which is beneficial designed for my experience.
thanks admin

While there are improvements to be made, I was struck by the sheer availability of parts to people like this engineer.

If the guy sees SparkFun and AliExpress, he sees thousands of times more options than his dad would 20 years ago.

When I order from eBay China (or more occasionally AliExpress) I too wait a month or more without tracking information. That's just the way they work. Sure it would be good if he had conventional higher-priced more tracked goods closer to home, but this is a huge improvement and change for people in remote locations.

European colonial powers tried to develop supply chain infrastructure too. Basically railroads to extraction sites. We'll see if China is any more successful.

Electric flight has potential for lowering the cost of transport. While batteries appear to be a terrible source of energy for flight compared to far more energy dense liquid fuels, high reliability and low maintenance may make it cost effective. Solar panels will allow a cargo drone to be "fueled" anywhere.

In case people are interested: Air cargo requires around 7 times more energy per kilometer than road cargo. But air transport can generally go in a straight line so the comparison often won't be quite so bad.

Do your figures include the cost of building the roads (in Africa, no less)?

No, the roads, or railways, have to be built while the air required for flying is already there. That, combined with the low cost of energy from solar PV may be enough for electric air transport to -- if you'll excuse the pun -- take off.

In the text there's an example of two ports being 24 hours away by ship but containers take a week due to slow paperwork in the shipping company and customs.

Technology can help, but with the focus of accelerating paperwork, not the physical containers. A system driven by SAP or similar software ?

I presume first movers in the field of electric flight cargo transport will be smugglers.

Chuma here, I wrote the article.

Some of these issues are infrastructure related: Nigeria's biggest port has only one dual-carriage way leading out of it and people spend days in the traffic there, Mombasa in Kenya has been doing repairs for a long time.

Inefficiencies like these add up to the slow clearing.

Thanks for contributing to the comments section, Chuma.

Cowen: "I so, so wish there were more articles like this." You mean articles based on, you know, intelligent observation rather than regression analysis. It's not surprising coming from Cowen, he being a world traveler who shares his observations from his travels. This may come as a shock, but economics once was dominated by intelligent observers and their equally intelligent observations. Now, economics is dominated by those who don't get out much, whose time and thoughts are prisoners of the little black box, as if all the important answers can be found by staring at it. Yes, I too wish there were more articles like this one, but that would require intelligent observers willing to share their intelligent observations, something that is in short supply because there are few places of higher learning teaching it. Indeed, the universal response to intelligent observations - "where's the proof?" - designed to silence intelligent observations.

On my few trips to the African continent, one thing that always struck as stupid, counter productive,and poverty inducing were the number intra-market checkpoints. Within a particular country there is not free movement of people and goods - which I imagine hampers supply lines quite a bit.

French failed president Macron has criticized Brazil and refused to meet Brazil`s President Captain Bolsonaro or send a high-ranking envoy to his ground-breaking inauguration. Sad. Will our country, America, side with failed leftist Macron, whose country Mr. Bolsonaro said to be an unlivable mess, or side with Brazil, a good ally of ours.
Whatever decisions we, as a people make, they will shape the future.

Thiago, your schtick is just as stale under your new nym.

I do not know who you are talking about. I am trying to help America do the right thing and stand by our ally to the south.

Fascinating article -- thanks.

I remember reading a blog a while back about a man who traveled with his family across the DRC.

They came upon a group of travelers that had been stranded by the side of the road. The group was waiting for car parts to arrive, and had been waiting there for a year.

Wait--WHAT? A year?

That reminds me of a Paul Theroux anecdote. He saw an African village all crowded under a single shade tree while a goat tied to a stake looked on. His unspoken thought was, plant more trees!

Future time horizon of zero. This is who Westerners think will finance their pensions.

-

yeah, right --- supply-chains/geography are Africa's major economic problem...

Not

Yeah, I'm inclined to agree with the general point. In what other scenario would serious people think of "too much land" as a barrier to development?

It's shorthand for "land lacking navigable waterways." It's too hard to move goods in any large-scale way. One can build major roads, of course, but that requires enormous upfront outlay in hopes of development that may or may not then occur.

Almost one-third of the African land mass is occupied by desert (Sahara and Kalahari): how many supply chain problems fail to exist by virtue of this prevailing geography? (Likewise, to how many unique supply chain problems are trans-Saharan trade and travel subject? [Is air travel over Saharan skies now more populous than land travel over Saharan sands?])

I think I read that Africa has a relatively small number of deep water ports for its size also, which can't help.

Chuma here, I wrote the article.

I'd say there is far more air travel over the Sahara than through it, as most flights of the flights out of Sub-Saharan Africa transit through Europe and the Middle East, thanks to the airlines who ply the routes.

You're right though, deserts may affect trade with the northern tip of the continent but the other countries experience issues between themselves.

The “too big” and “no scale” are complete cop-outs. The problem is that African governments do not not allow enough economic freedom.

For example “Although they’re geographically close, the countries are separated by two other ECOWAS members - Togo and Benin, both of which are French-speaking. As a result, any trade done by truck would incur transit fees to both Togo and Benin and then an additional 7% duty in either Lagos or Accra.”

These stupid limitations in trade for a minimal amount of government income (and of course bribes to customs officials on top of that) are KILLING people. They are a crime against humanity.

Africa should simply become a single no-tarrif trade and free movement of people zone. The accompanying reduction of over-regulation and corruption will be amazing.

South African whites manage a fairly developed world standard of living - maybe even at the higher end. So it is possible for Africans to be wealthy despite the current lack of trading between nations. But I think it would help to reduce trading barriers.

"Africa should simply become a single no-tarrif trade and free movement of people zone. The accompanying reduction of over-regulation and corruption will be amazing."

Until any somewhat functioning African country (Mauritius, Cape Verde, Rwanda, etc.) is swept by hordes and looted by "investors". As the anthem of Portuguese speaking Guiné Bissau points out, (translation to English from Wikipedia)

"The banner of our struggle

Has fluttered in the skies.

Forward, against the foreign yoke!

We are going to build

Peace and progress

In our immortal country!

Peace and progress

In our immortal country!"

Africa should simply become a single no-tarrif trade and free movement of people zone.

Oh, yeah, I'm sure Botswana (a stable democracy since independence, the lowest corruption rating on the continent, per capita PPP GDP of $18,825, population 2.25 million) would really benefit by being flooded by migrants from failed states like Libya and Somalia.

Diversity is our strength?

So once again we see that Africa--the whole Global South, actually--has all the land, human capital and natural resources needed to thrive. There is no "refugee crisis," only (mostly) surplus males leaving stunted, Big Man societies. They should stay and fight for their countries.

Immigration is just a political weapon and perverse incentive at this point, enabling consumptive, toxic political and economic models. We should practice benign neglect to let all these places that are, as usual, "failing" sort themselves out, or just depose their governments and give them to the billionaires to run.

"Immigration is just a political weapon and perverse incentive at this point,"

"...or just depose their governments and give them to the billionaires to run."

So dark skinned people who emigrate are a political weapon made to harm you but deposing governments to give control over the lives of those who live in them to billionaires is what? This would require actual real weapons you know. Maybe they could be called "For your own good devices?" instead?

If the place is as hopelessly horrible as some immigration advocates insist it is, then yes deposing their cruelly inept governments would be justifiable.

Immigration actually retards political reform: all the dissidents and competent opposition leave, and the government gets to offload its poor to go be somebody else's problem.

Good article -- nice to read something that is mostly information rather than argument..

Cecil Rhodes' idea of a Cape to Cairo railroad still isn't finished, right?

And as a practical matter there's unlikely to be one. There are three breaks-of-gauge and at least seven jurisdictions involved on any route, and all likely routes for such a railway include one jurisdiction currently subject to extensive US economic sanctions (Sudan).

It would/i> be reasonably easy to convert the 1000 mm gauge of the dilapidated rail systems of Ethiopia/Uganda/Kenya/Tanzania to the 1067 mm Cape gauge used in both Sudan and southern Africa, which could then be linked up into a single-gauge web covering half the continent, if not an actual Cape-to-Cairo corridor. But instead, the Chinese built standard (1435 mm) gauge lines for Ethiopia-Djibouti and Kenya, and the plan is for more standard gauge lines in Tanzania, Uganda, Rwanda, and Burundi.

Given that southern Africa's Cape gauge network is the most important one (in value of freight, miles of track, and number of countries connected) in Africa, this sure looks like a deliberate effort to forestall African rail integration. China wants railroads for extracting resources from clients, not for the economic development of the clients.

It took until 1970 to get rail across Australia. Given similar population density for around half the route Africa might need similar economic development and coordination between states to get there. This is ignoring the presence of greater geographical barriers and the fact Africa is 4 times larger than Australia. So maybe 30 years in the future for the economic development and maybe 30 years in the past to match Australian state's lack of coordination on rail.

The British -- for a certain value of the word British -- didn't manage it until 1970 in Australia. Or 2004 north to south. By that point they seemed to have mostly lost interest in building railways in Africa.

I'm unimpressed by the stats about Africa's large size and many languages and cultures. It goes without saying that a large continent will have "obstacles" of size and differing cultures.

But that very description --"Africa’s land mass is greater than the USA, Europe, and China combined" -- shows the incoherence of the argument. Eurasia is an even larger and more diverse landmass than Africa, but that didn't stop Europe, East Asia, and to a lesser extent South Asia from developing.

Divide African into sub-regions the size of say Europe or China or the USA and the size and language "obstacles" are vastly reduced. But most of Africa's sub-regions have not developed the way that Europe, China, and the USA have.

Size and language are not the causes of Africa's underdevelopment.

Chuma here, I wrote the article.

I don't imply that size and language are the only causes of Africa's underdevelopment. I was speaking about trade specifically.

Also, by discussing the diversity of Eurasia you're neglecting the other historical factors that contributed to the growth of those societies and simultaneously retarded Africa's growth.

Comments for this post are closed