Carisca yesterday held it’s 2024 supply chain research summit at the Kempinski hotel in Accra to deliberate on transformation and the indispensable supply chain force.
Speaking on the theme “Africa’s Supply Chain Resilience for Economic Transformation”, Mr. Atoapem Frimpong Barimah who delivered the keynote address set the tone by asking whether or not if economic transformation has ever been achieved without supply chain.
He recounted that throughout history there have been countless examples of transformational changes reshaping societies, economies and industries with supply chain right in the thick of affairs.
“From the industrial revolution to the digital age, transformative moments have propelled humanity forward, unlocking new opportunities and reshaping the world as we know it now but behind every moment of the transformation lies a silent yet indispensable force – the supply chain, it is the unsung hero, the invisible backbone that supports and sustains the very fabric of change”, he opined.
Mr. Frimpong stated that considering the industrial revolution, a seismic shift that ushered in an era of unprecedented progress and prosperity was still hinged on the emergence of efficient supply chains connecting raw materials to factories and markets with unprecedented speed and scale.
HE cited that similarly, the rise of the digital age has been made possible by intricate networks of supply chains enabling the seamless flow of information, goods and services across the globe at the click of a button.
However, Mr. Frimpong Barimah indicated that it’s not just in grand historical moments that supply chain played a transformative role but in the world over every industry uses as the lifeblood of economic activity, facilitating the creation, production, and distribution of goods and services that touch the lives of billions.
He noted that in recent years, global supply chains have come under immense pressure because of unprecedented trade turbulence, economic uncertainty, geopolitical events and natural disasters.
Mr. Frimpong stated that “although the integration of African economies into supply chains is relatively low compared with other regions, disruptions to supply chain operations have a more than proportionate adverse impact on our economies. This gives relevance to our theme for this year’s summit – Africa’s Supply Chain Resilience for Economic Transformation. We can only be resilient to drive the expected Economic Transformation through value addition”.
Again, he narrated that “Africa’s export of few manufactured goods is an indication of our weak participation in supply chain trade. The 54 countries of Africa combined account for only 2.6 percent of global trade. This figure drops to 0.8 percent when only manufactured goods are considered (COMTRADE/UNSTAT 2023).
The share of manufactured goods in total exports is only 34 percent (66% of exports are without value addition) for African countries, which is relatively low compared with 83 percent for East Asia, 74 percent for low- and middle-income countries excluding African countries, 68 percent for South Asia, 45 percent for Latin America, and 70 percent for the world average (UN COMTRADE 2023). Half of the manufactured products exported by the continent come from only three countries: South Africa (27 percent), Egypt (10 percent), and Morocco (10 percent). Thirteen countries out of 54 produce 81 percent of the manufactured exports.
This concentration of export countries is even more pronounced when considering only fully transformed goods. Three countries (South Africa, 28 percent; Morocco, 15 percent; and Nigeria, 12 percent) sell 55 percent of fully transformed product exports. In sharp contrast with other regions of the world, especially the countries that comprise the Association of Southeast Asian Nations (ASEAN), African exports have so far not been connected to regional supply chains. Regional value chains only accounted for 2.7 percent of Africa’s GVC participation in 2022, compared with 26.4 percent for Latin America and the Caribbean and 42.9 percent in developing Asia, often called ‘factory Asia’ to emphasize that supply chain trade remains within the region.
Among the five AU regions, the participation rate is lowest for North Africa and highest for East Africa, at around 5 percent. This is why the AfCFTA has declared the development of RVCs a priority objective.
The GVC participation indicators show that among Asian and Pacific countries (excluding high-income countries), the degree of regional integration was almost six times higher than in Africa in 2022, and the trend hasn’t change”.