The team at Raindew Trade underline the importance of digitising Africa’s trade ecosystem and delivering innovative and low-cost finance at every layer of the supply chain.


Anyone that has conducted trade-related business in Africa has likely been frustrated with bureaucratic and onerous administrative and officious red tape that often results in not getting paid timeously. Delays in payments usually lead to liquidity and cash flow challenges for manufacturers and suppliers across the value chain. This has been prevalent in every sector of African economies since time immemorial and has deterred investment and inauspiciously affected much-needed economic growth.

Two decades into the 21st century, and not much has changed. Innovative and convenient steps need to be taken to assist suppliers and buyers in creating an environment that bodes well for their sustainability, and reduces costs attributed to payment backlogs and delays. That platform has arrived and is disrupting the supply chain and marketplace in wonderful ways.


Raindew Trade partners with Tradeshift

In June 2020, Raindew Trade announced the launch of a US$1.5bn Covid-19 liquidity support and digitisation drive for supply chains in Africa in partnership with Tradeshift, the global leader in supply chain payments and marketplaces.

Launched on the back of the recent roll-out of Tradeshift Engage and a similar US$55bn Instant Supplier Payment programme with Denmark’s export credit agency, the liquidity support and digitisation programme will inject liquidity into supply chains at scale and with speed and build true digital collaboration between suppliers, buyers and financing institutions.

Supply chain disruptions, including Covid-19, have been an absolute stress test for global supply chains and have accelerated the demand for liquidity and the uptake of digital solutions, tools and services, speeding up the global transition towards a digital economy.

Corporate buyers can request upfront payments to pre-qualified suppliers to be made on their behalf, with credit payment terms of 30 to 360 days. Suppliers can request upfront or early payments within 24 to 48 hours after approval of invoice for payment.

“The outbreak of the Covid-19 pandemic has caused severe supply chain disruptions and constraints on economies around the world, including African economies. This has left African businesses under severe liquidity and cash flow pressure, with many on the brink of collapse and in urgent need of cash and liquidity,” the two companies say in the statement.

“Supply chain disruptions, including as a result of Covid-19, have forced companies to embrace digital transformation of supply chains and business processes,” says Tradeshift Middle East & Africa GM Dan Quinn. “Business leaders across the region are quickly realising they can no longer delay digitising core operating infrastructure that is essential to business continuity.”

“The demand and availability of liquidity and digital tools to advance global trade is something which will endure going forward, with benefits for those providing capital and technology as well as those receiving it,” adds Raindew Trade founder and executive director Allan Musona.

The new initiative addresses the cash flow and liquidity challenge African businesses are facing in the current Covid-19 economic environment. Using the Tradeshift platform, the Instant Supplier Payment Scheme will inject billions of dollars of liquidity into selected African markets, including South Africa, through upfront and early payments to suppliers.

Tradeshift drives supply chain innovation for the digitally connected economy, and helps buyers and suppliers digitise all their trade transactions, collaborate on every process, and connect with any supply chain app.


Freeing up supply chains from paper trails

The crushing cash flow issues companies have faced since markets started shutting down in March continue even today. Buyer payment cycles that were 30 to 60 days stretched to 90 days and, now, are running as long as 180 days – assuming that suppliers will get paid at all. This has been the number one challenge we have heard from business partners, and continues to threaten business continuity during the recovery period, not only across the region but around the world.

The second issue is that companies still relying on paper invoicing and supply chain management systems spent lockdown periods unable to churn out invoices and follow up on payments. Piles of paper invoices, physical checks and documentation stuck in empty offices during the lockdown left remote workforces, including accounts payable teams, with limited options to process and settle them. This restricted cash from flowing through the supply chain, leaving many companies on the brink of collapse.


About Raindew Trade

Raindew Trade is a trade and supply chain financing and services platform providing working capital and supply chain solutions to corporates in Africa and other selected markets.

Our commitment is to create economic opportunity for all through comprehensive working capital solutions and tech-enabled trade and supply chain solutions for corporate buyers and suppliers, including importers and exporters.