Welcome to a special monthly edition of our supply chain digest, where we break down the latest supply chain 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 of this special edition covering the month of November, 2023.
Ranking the Impact: Green Zone, Yellow Zone, and Red Zone
We understand that navigating the complex world of supply chains can be challenging. To make things easier, we’ve categorized the latest news and data into three zones based on their potential impact like the colors of traffic control lights. This ranking will help you better understand which trends may have a significant effect on your business and which ones are less likely to disrupt your operations.
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
-
South African Airways’ Intercontinental Route Relaunch
Sectors Affected: Aviation, Tourism
Countries and Locations: South Africa, Nigeria and Brazil
The South African Airways (SAA) carrier recently launched its first intercontinental route in three years, with a flight between Cape Town International (CPT) and São Paulo Guarulhos (GRU). The relaunch may have a limited impact beyond the aviation and tourism sectors in South Africa and Brazil and other connecting culture and tourism hubs like South West Nigeria. (Learn More)
No. 2 – 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 marginal positive/negative disruptions or challenges but are not severely detrimental to overall supply chain operations.
-
Ford’s South Africa Unit Investment in Hybrid Vehicles Production
Sectors Affected: Automotive Manufacturing, Energy and Environment
Countries and Locations: South Africa, Potentially neighboring countries in the supply chain.
Ford’s $281 million investment in hybrid vehicle production in South Africa signals a shift toward electric vehicles. The impact is moderate as it influences the automotive sector, but the full supply chain effect may be limited initially. The call for an electric vehicle policy may create a ripple effect in neighboring countries. (Learn More)
-
AfDB’s Special Agro-Industrial Processing Zones Alliance
Sectors Affected: Agriculture, Finance and Investment
Countries and Locations: Across Africa
Africa Development Bank (AfDB) has announced the launch of the Special Agro-Industrial Processing Zones Alliance (SAPZ). The $2 billion initiative can significantly impact the agricultural sector, but success depends on effective implementation. It holds the potential to transform Africa’s food and agriculture market, but challenges in execution may limit its immediate impact. (Learn More)
-
MTN’s Potential Exit from Three African Markets
Sectors Affected: Telecommunications, Economic Development
Countries and Locations: Guinea-Bissau, Guinea-Conakry, Liberia, potentially impacting the West and Central Africa region
African telecommunication giant, MTN is considering exiting three markets on the continent. The pan-African mobile operator, which currently has a presence in 19 countries on the continent and the Middle East, said that discussions are also ongoing regarding the potential “orderly exit” of its operations in Guinea-Bissau, Guinea-Conakry and Liberia. The exit may affect the telecommunication sector in the mentioned countries but is unlikely to cause a ripple effect on a larger scale. (Learn More)
-
Afreximbank’s African Gastronomy and Culinary Arts Programme
Sectors Affected: Agriculture, Tourism
Countries and Locations: African nations participating in the initiative
The African Export-Import Bank (Afreximbank) in Cairo launched an African Gastronomy and Culinary Arts Programme under its Creative Africa Nexus Initiative (CANEX). The introduction of the programme would help to refocus continental efforts towards local food production to ensure food security, reduce high food costs and imports and minimise the impact of external shocks on Africa’s food supply chain. The program aims to boost local food production and tourism, impacting agriculture and potentially the tourism sector. (Learn More)
-
EU Partnership with African, Caribbean, and Pacific Countries
Sectors Affected: Development, Economic Growth, Migration and Mobility
Countries and Locations: African nations participating in the initiative
The EU has built a broad partnership with 79 countries in Africa, the Caribbean and the Pacific. The partnership can have a moderate impact on development and economic growth across the involved regions with Africa having the largest number of participating countries in the agreement i.e. a total of 47 countries. (Learn More)
-
AfCFTA Focus on the Automotive Industry
Sectors Affected: Automotive Manufacturing, Trade
Countries and Locations: Across Africa
The African Continental Free Trade Area (AfCFTA) secretariat said the automotive industry is one of four priority sectors that offer opportunities to boost intra-African trade. Improved logistics Is the most important factor to boost the automotive industry, and Africa already spends $47 billion on transport and logistics. The automotive industry focus has the potential to boost intra-African trade but may take time to materialize. (Learn More)
-
GSMA Research on Smartphone Costs in Africa
Sectors Affected: Technology, Consumer Goods
Countries and Locations: Across Africa
Taxation and duty fees add 10 to 30 percent to smartphone costs, depending on the country, across Africa, GSMA has disclosed. It stated this in its ‘The Mobile Economy Sub-Saharan Africa (2023)’ report, saying that this has been affecting device costs, making it out of reach for most people in the region. Taxation and duty fees impacting smartphone costs may have a moderate influence on the technology and consumer goods sectors. (Learn More)
-
10mg Pharma’s AI-Driven Access to Low-Cost Medications
Sectors Affected: Healthcare, Finance
Countries and Locations: Nigeria and potentially other African countries
Nigerian startup 10mg Pharma is using AI-driven code trees to simplify access to low-interest credits and low-cost medications for healthcare providers in Africa. This facilitates bulk medication purchases, leading to savings of up to 15 per cent, which are then passed on to patients. The startup’s approach may moderately impact the healthcare and finance sectors, improving access to medications. this and has so far helped 1,100 healthcare providers reach over 150,000 chronic pain patients with low-cost medications, reducing treatment costs by up to 15 percent. (Learn More)
No.3 – 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.
-
Russia-Ukraine Crisis Affecting Nigeria’s Crude Oil Exports
Sectors Affected: Energy, International Trade
Countries and Locations: Nigeria, potentially other African oil-producing nations
Substantial price shocks impacting commodity and energy prices globally, the Nigerian National Petroleum Company Limited (NNPC Ltd.) has reported that the ongoing Russia-Ukraine crisis has hurt Nigeria’s crude oil exports to international markets. The crisis has disrupted Nigeria’s crude oil inflow into Asia, impacting the energy and trade sectors. Shifts in export destinations create challenges, with potential long-term consequences for the oil-dependent economy. (Learn More)
-
Nigerian Inflation and Economic Challenges
Sectors Affected: Consumer Goods, Manufacturing, Agriculture
Countries and Locations: Nigeria
There is a continued uptick in inflation, squeezing consumers’ spending and saving as well as constraining manufacturing productivity. Nigeria’s inflation keeps going up instead of regressing, rising to 27.33 per cent in October from 26.72 per cent in the previous month. High inflation rates negatively impact consumers, manufacturing, and agriculture, indicating severe disruptions in the Nigerian economy. (Learn More)
In Summary
Overall, we examined 11 economic trends with varied impacts on supply chains in Africa. While majority of these trends indicate moderate impacts, some developments pose severe threats to supply chains, others present opportunities or have a more localized impact. The interconnected nature of the global economy underscores the importance of monitoring these trends for a comprehensive understanding of their implications on supply chains in Nigeria and Sub-Saharan Africa. Policymakers and actors (including businesses) must address these issues to ensure financial sustainability, growth, and development in the ever-evolving landscape of supply chain management.
This special edition of our monthly supply chain digest for November 2023, it marks the final tracking of trends impacting supply chain-linked businesses for the year. Looking ahead, our special digest for December will focus on forecasting the trends likely to impact supply chains in the upcoming year, 2024. Stay tuned and follow us on our social media platforms for more valuable insights as we navigate the evolving landscape of supply chain dynamics.
Have A Happy Holiday!
