While business may be slowing elsewhere, Africa is booming with many supply chain opportunities for the entrepreneurial investor who’s keen to meet distribution needs in developing countries. So says Abré van Buuren, SAPICS member and training manager for Imperial Health Sciences’ (IHS) Africa Supply Chain Academy.
“Most opportunities are in retail – think food and cellular – and public services, since governments are the big spenders when it comes to service delivery. What’s needed now are innovative solutions that will work well in the unique African context. It’s a time for entrepreneurs and for those who willing to work hard – the pay-off will be big,” he says.
According to Van Buuren, enormous opportunities exist for companies to partner with governments on delivering public services. A particular area of interest is in the distribution of medicines.
“Major donors of ARV drugs and the like are pushing governments to partner with the private sector in developing their public health supply chains,” he says. “Their intention is to ensure that the millions of dollars worth of medicines that are donated actually get to those who need them most.”
In Malawi, a local distributor (CML), which has received much support from IHS and USAID, has rapidly grown as it assists the government in distributing medicines. CML has invested in its routing and scheduling system, its vehicle fleet and hired more staff members to cope with the growth.
“This is evidence of the fact that if the correct private sector partner is engaged, it can enable a speedy, successful implementation of supply chain infrastructure, particularly where funding is available to enable rapid deployment,” says Van Buuren. He adds that this demonstrates the feasibility of governments outsourcing the key supply chain functions like procurement, storage and distribution.
“This may be the only sustainable solution to provide better outcomes in low resource settings where the national system may not have the resources to have the capacity one finds in the private sector.”
The rapid growth of economies like Nigeria and Angola is resulting in a huge need for supply chain infrastructure. “In Nigeria, for example, we’ve found that just two organisations are looking after the distribution of pharmaceuticals. The opportunities are clearly enormous!”
Van Buuren notes that especially in countries that are growing rapidly because of the discovery of oil, such as Angola, some industries are being neglected. “It’s like the country’s focus shifts to oil so other industries simply lag behind, creating huge opportunities in these areas.”
In Angola, just one central store is tasked with distributing medicines to the entire country. “This means that opportunities exist for partnering with the government on, for example, building regional medicine stores so that that medicines can reach the smaller towns.”
According to Van Buuren, the cellular industry is growing extremely fast. “Demand is huge and product needs to be distributed to outlying areas,” he says. Also, the retail food industry appears to be a bit behind in several countries where one retailer holds the monopoly. “In Rwanda, for example, there’s just one big retailer and no healthy competition.”
Although Africa is ripe with opportunity, it’s important to be aware of the challenges of doing business. “One stumbling block is that in many countries, there is a lot of politics in doing business – which is perhaps why business isn’t growing at a faster rate in Africa,” he says. “It’s all about who you know and how you approach them – so make sure you learn the culture and how best to operate in it.”
Whatever the challenges, Van Buuren says the need for innovative investment in Africa is so big it’s worth exploring.
“Africans are hungry for knowledge and change. They want to work with people from other countries. These are people who do not suffer from an ‘entitlement complex’ – they would do anything to gain skills and knowledge and therefore make great investment partners.”
Africa is growing with a commensurate increase in the supply chain opportunities. “The time is now,” he says.