In 2020, those relying on goods from China learnt the hard way about the dangers of not having flexible sourcing. “In the first quarter of 2020, the COVID-19 crisis caused mass production shutdowns and supply chain disruptions due to port closures in China,” explains Kagure Wamunyu, Chief Strategy Officer at Nigeria-based technology start-up Kobo360, which aggregates end-to-end haulage operations. “This caused a ripple effect across all global economic sectors, including Africa.”
Africa experienced the impact of a production slowdown in China from two different angles. In Q1 2020, China’s demand for African raw materials and commodities declined drastically, while the continent’s access to industrial components and manufactured goods from the region were also restricted.
The coronavirus fallout has proven a double-edged sword for Africa, however. “The current crisis creates an opportunity for African countries to build value chains as well as take advantage of the breakdown in supply chains from China and Europe,” says Ms Wamunyu.
Given the January 2021 implementation of the African Continental Free Trade Area (AfCFTA) agreement, which will form a US$3.4 trillion economic bloc, the disruption to operations in key manufacturing spots may have happened at an ideal time.
Many businesses have had no choice but to seek out alternative suppliers. In doing so, they have been exposed to some of the wider benefits of developing inclusive supply chains, including the ability to access new and innovative ideas, develop more competitive businesses, and tackle inequality.
Minority Supplier Development UK (MSDUK), which brings together global corporations and ethnic-minority businesses to develop more inclusive and diverse supply chains, saw the number of corporate members almost double in the seven months after the virus first emerged.
The pandemic prompted corporate businesses at MSDUK to buy from ethnic minority suppliers offering personal protective equipment and essential goods. “Those entrepreneurs were far better when it came to quality and service – they were working 24/7 to make sure they were providing those services to our corporate partners,” says Mayank Shah, Founder and Chief Executive Officer of MSDUK. “There is a very simple business case [for developing inclusive supply chains], even if we ignore the social impact.”