Africa’s Role in the Global Supply Chain

The plenary on Africa’s role in the global supply chain moderated by Nneka Eze, Partner and Lagos Office Director, Dalberg Global Advisors featured Hon. Okechukwu Enelamah, Minister of Trade, Industry and Investment, Nigeria, Dr. Abdou Soulèye Diop, Managing Partner of Mazars Morocco and President of the African and South-South Commission CGEM, Mr. Bill McRaith, Chief Supply Officer, PVH and Mr. Mohammed Samir, President – India, Middle East and Africa (IMEA), Procter & Gamble. Some critical elements that enhance Africa’s role in the global supply chain include: value addition, government facilitation, and regional integration. The panelists provided perspectives that spoke to how these elements manifested themselves in different regions across Africa.Abdou Soulaye Diop of the African and South-South Commission of CGEM described Morocco’s experience with value addition and transitioning from industries based exclusively on labor-cost (such as textile exporting), to aeronautics production, which now provides greater opportunities for local integration and value addition. Bill McRaith from PVH stated that value addition was also part of what led PVH to reconsider its investments in Africa. While there were many initial barriers, PVH made a concentrated effort to learn from past experiences and develop supply chains in a way that benefited businesses, local stakeholders and the environment. This was particularly important for PVH’s planning and construction of the Hawassa Industrial Park in Ethiopia, which is designed to be a “best-in-class” apparel manufacturing center and combines sustainable processes for industrial production, the local community and the environment.The panelists suggested that involvement of host-country governments is another critical component for Africa’s integration into the global supply chain. In PVH’s investment in Ethiopia, McRaith stressed that having the government at the table and a single point of contact for investors was “a game changer for us to be able to work and get things done.” Diop echoed the importance of creating a one-stop shop for investment, and implementing regulatory framework for public-private-partnerships (PPPs) to structure global win-win partnerships. Minister of Trade, Industry and Investment in Nigeria, Dr. Okechukwu Enelamah, noted that the Nigerian government has taken such factors into account in its three-part approach to facilitate new supply chains. The Nigerian government is focused on creating an enabling environment so that supply chain participants know what to expect, how long processes should take, and can work through a “one government” approach. Nigeria has also launched a national office for trade negotiations, and formed an industrial council to ensure that companies and in country-partners are working in a coordinated manner.Regional integration is the third critical component to global supply chain development and one that “will drive the economy of Africa in general”, noted Mohammed Samir from Procter and Gamble. Samir explained that with greater regional integration, it will be possible to drive prices down over time. He also stated that considering which aspects of supply chain production can yield the greatest job creation potential is also important, as regional integration deepens and supply chain logistics improve. Diop believes, the greatest momentum in supply chain growth will likely be in the next five years and that it is important for companies to invest and do their part. Even with many pressures facing the global economy, Africa presents an attractive market that could play a greater role in global supply chain.