Pandemic accelerates supply-chain innovation in Africa

As a way to reduce infections, many governments imposed movement restrictions that adversely affected businesses for the greater part of 2020, but innovation around the supply chain has been a silver lining for retailers as well as producers and distributors of goods.

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African supply chains have never faced a challenge as great as the restrictions on movement amid the global COVID-19 pandemic. As a way to reduce infections, many governments imposed lockdowns that adversely affected businesses for the greater part of 2020.

The innovation around the supply chain, however, was a silver lining for many economies in the region, according to the International Finance Corporation report, 'E-Conomy Africa 2020'.

"E-Logistics companies have implemented many creative solutions in response to the pandemic; overall, the industry is poised for rapid growth post-COVID-19, particularly as supply chains in sectors such as agriculture, manufacturing, and basic goods would be increasingly deemed critical," the report said.

The challenges around supply chain management, including poor communications and transportation infrastructure, were a pain point for African businesses even before the pandemic hit. In addition, lack of access to financial services often locked small businesses and individual producers of goods out of supply chains. 

IFC sees the chaos in the informal business sector — which includes small-scale economic activity that often is not taxed or monitored by governments — being tamed with the rise of supply chain management platforms. More broadly, adoption of emerging technology is already changing marketplaces across Africa by bringing down the cost of trade.

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