Welcome to your weekly supply chain digest, where we break down the latest trends affecting businesses in Nigeria and across Africa. Brought to you by XNECT HUB – Your source for market and supply chain intelligence. We’re here to keep you informed, without the jargon. Let’s dive into the highlights for the third week of October ending Friday 20th October, 2023.
Assessing Impact: Green Zone, Yellow Zone, and Red Zone
We know that dealing with supply chain complexities can be tough. So, we’ve sorted the recent news and data into three zones – Green, Yellow, and Red, like traffic light colors. This system will help you see which trends could strongly affect your business and which ones are less likely to cause disruptions.
No.1 – In the Green Zone (Least Impact)
In this zone, we explore trends with the least impact on supply chains. They’re noteworthy but won’t shake things up significantly or affect the smooth functioning of supply chains.
5G Adoption in African Countries:
• Sector(s): Telecommunications, Technology
• Countries and Locations: South Africa, Mauritius, Nigeria, Togo, Seychelles, Réunion, Zimbabwe, Botswana, Zambia and Tanzania
The adoption of 5G technology in African countries, while significant, is not likely to disrupt supply chains. It represents a positive development in improving connectivity and technological advancements in Africa. The least impact ranking is because 5G adoption is generally a positive development and doesn’t introduce significant disruptions to existing supply chains. It’s more about technological advancement and connectivity. (Learn More)
Kenya’s Homemade Smartphones
• Sector(s): Technology, Telecommunications
• Countries and Locations: Kenya
The release of Kenya’s homemade smartphones is expected to have the least impact on supply chains. It signifies a positive step in promoting digital access and inclusion in Kenya. The least impact ranking is because the release of homemade smartphones is a positive development for digital access and doesn’t introduce disruptions to supply chains (Learn More)
No.2 – In the Yellow Zone (Moderate Impact)
Moving into the Yellow zone, we highlight economic indicators and industry trends that have a moderate impact on supply chains. These factors may cause some disruptions or challenges but are not severely detrimental to overall supply chain operations.
Challenges in the Nigerian Publishing Industry
• Sector(s): Publishing, Printing
• Countries and Locations: Nigeria
The Nigerian publishing industry is facing moderate disruption due to challenges such as inflation, rising operating expenses, and a shift to digital media. These factors have led to increased costs and decreased profitability in the sector, with implications for traditional publishing houses and bookstores. The moderate impact arises from challenges in the publishing industry, which, while disruptive, is not as critical as the dollar shortage for FMCGs. It may lead to changes in the industry but doesn’t pose an immediate supply chain crisis. (Learn More)
Critical Minerals and Africa’s Mineral Economy
• Sector(s): Mining, Energy, Technology
• Countries and Locations: Various African nations
During the week, a high level discussion on critical minerals in Africa highlights the need for sustainable practices and localized supply chains. While the growing demand for clean energy technologies and decarbonization presents opportunities, the need to fund supply and strengthen the mineral supply chain is a moderate disruptive factor. The moderate impact is due to the potential for Africa to secure its critical minerals supply. While essential for clean energy technologies, this is a longer-term consideration and may not immediately disrupt existing supply chains. (Learn More)
South Korea Seeking African Graphite Amidst Chinese Export Controls
• Sector(s): Battery Manufacturing
• Countries and Locations: South Korea, Mozambique, Tanzania
South Korea’s search for alternative sources of graphite due to China’s export controls may moderately affect the supply chain for battery manufacturing. The impact is contingent on the success of securing graphite from African countries. The moderate impact reflects the potential for South Korea to mitigate the impact of export controls. However, the impact is contingent on their success in securing alternative sources of graphite from African countries. (Learn More)
Ghana’s Lithium Mine Project
• Sector(s): Lithium, Electric Vehicles
• Countries and Locations: Ghana
Ghana’s lithium mine project has the potential to moderately impact the supply chain for lithium resources, primarily related to electric vehicle battery production. This aligns with the global shift toward electric vehicles. The moderate impact is due to the potential to impact the supply chain for lithium, but it aligns with the global shift to electric vehicles and doesn’t immediately disrupt supply chains. (Learn More)
South Africa’s Green Energy Transition Grants
• Sector(s): Energy, Renewable Energy
• Countries and Locations: South Africa
The grants for South Africa’s green energy transition, while positive, may have a moderate impact on the energy sector’s supply chain. The challenge lies in the scale of funding required to transition from coal to renewable energy. While positive for the energy sector, the moderate impact reflects the scale of funding required for a green energy transition, which may not lead to immediate supply chain disruptions.
Nigeria’s API Manufacturing Investment
• Sector(s): Pharmaceutical, Healthcare
• Countries and Locations: Nigeria
Emzor Nigeria’s Active Pharmaceutical Ingredients (API) manufacturing investment could moderately impact the pharmaceutical supply chain by reducing the reliance on imports for critical ingredients. The moderate impact is due to the potential to reduce reliance on imports for critical pharmaceutical ingredients, impacting the pharmaceutical supply chain over time. (Learn More)
No.3 – The Red Zone (Severe Impact)
And now to the red hot zone where we highlight economic indicators and industry trends that have a severe impact on supply chains. These are factors that can cause significant disruptions, delays, or challenges in supply chain activities and require immediate attention and mitigation efforts.
Nigeria’s Dollar Drought and Forex Losses for FMCGs
• Sector(s): Fast-moving consumer goods (FMCGs)
• Countries and Locations: Nigeria
The ongoing dollar shortage in Nigeria, along with a significant weakening of the national currency, has severely impacted the supply chains, particularly for fast-moving consumer goods companies. This has led to substantial net foreign exchange losses for these firms, affecting their ability to source raw materials and impacting the consumer goods sector in Nigeria. The severe impact is due to the direct and immediate consequences of a dollar shortage, which significantly affects the ability of FMCGs to source raw materials. This impacts their operations and potentially leads to increased prices for consumers. (Learn More)
Global Fertilizer Shortage Impacting Africa
• Sector(s): Agriculture
• Countries and Locations: Nigeria, West and Central Africa
The global fertilizer shortage has a severe impact on the agricultural supply chain, particularly in Nigeria and West and Central Africa. It has resulted in skyrocketing fertilizer prices and food insecurity, posing a significant disruption to the agricultural sector. The severe impact ranking is due to the immediate and severe consequences of a global fertilizer shortage, leading to skyrocketing prices and food insecurity in Nigeria and West and Central Africa. This directly disrupts the agricultural supply chain and food security. (Learn More)