A supply chain revolution is required in Africa to harness the continent’s potential when it comes to sustainable growth.
Speaking at GTR’s East Africa Trade & Commodity Finance conference last week, Justin Sherrard, global strategist at Rabobank’s food and agribusiness research, told the audience and GTR that partnerships between local and global companies doing business in Africa should form the backbone of supply chains.
“Partnerships that match the capabilities and networks of global F&A companies and local champions are central to effective supply chains,” he said.
Sherrard explained that historically, partnerships have commonly been formed between farmers and traders, and separately between traders and off-takers, but a link is now needed between the start of the supply chain (the farm inputs) and the very end.
He suggested that new and existing global companies doing business on the continent need to find models to engage directly with smallholders. Examples could include assisting farmers to produce more; designing smallholder farmer programmes (such as public-private partnerships); and supporting small farmers with finance tools (including input financing schemes).
Stronger, more resilient and more responsive supply chains are needed, said Sherrard, and by achieving a partnership approach, companies will be able to ensure security of supply and sustainable growth.
Africa has a growing trade imbalance: its import growth is outstripping that of its exports, and the continent is increasingly being seen as an import region. “This is not the pathway to a sustainable growth model,” said Sherrard. He called for companies to be creative and innovative when managing business models, allocating risks and dealing with the challenges of doing business on the continent. As far as poor infrastructure is concerned, he noted: “Improvements in infrastructure take time. The challenge now is to make best use of existing infrastructure.”