Ethiopia is on the cusp. Since Prime Minister Abiy Ahmed came into office in April 2018, Ethiopia has laid down a series of reforms, most notably ... softening its stranglehold of key sectors of the economy, namely aviation, logistics, telecoms and energy. But there is a prelude to all this.
Fragility in Africa therefore breeds insecurity.
Of the 35 fragile countries in the world, 19 of them are in Africa and they are home to more than 200 million people, which represents about 20% of the continent’s population.
The annual global cost of conflict is estimated at $100bn and therefore, security remains a major issue of concern in Africa, and globally.
In some instances, poor governance on the continent has led to military seizures of political power, through coups, resulting in democratic backsliding as seen in Mali, Burkina Faso, and Chad in recent times.
Impact stretches to supply chains
Africa’s security challenges tend to disrupt supply chains within the continent, thereby affecting both the manufacturing and distribution of goods and services. For instance, some of these security challenges have been manifested through violent extremism, militancy, piracy, and other forms of transnational organised crime, such as kidnapping for ransom. Given the continent is largely dependent on both land and sea routes for cross-border trades, the disruptive effects of these challenges on the supply chain are significant.
In some instances, these disruptions have resulted in food shortages, famine, and humanitarian crises. This has been the case in the Lake Chad Basin and the Sahel region, where the presence and activities of violent extremists affiliated with Al-Qaeda and the Islamic State have affected transportation routes both by land and by sea.
Similarly, in the case of Nigeria’s Niger Delta region, the prevalence of piracy and militancy has also put sea transport routes at high risk.
Role of poor governance
It is also pertinent to note that protracted years of poor governance within African states have also led to instances of politically motivated social and, in some instances, civil unrest. This has resulted in insecurity, potentially affecting supply chains within the continent.
For example, despite South Africa’s position as the 2nd largest economy on the continent by GDP, it still has one of the world’s highest poverty and unemployment rates at 50% and 34.4%, respectively, by 2021 estimates. This has often resulted in civil unrest and service delivery protests.
Achieving Africa’s sustainable economic growth and development in the long term is largely dependent on credible governance
In mid-July 2021, the vital N3 highway corridor which is between the Port of Durban, which is where 60% of containers arriving in the country, and in Gauteng, which is the country’s most economically important province, were temporarily blocked. This was due to rioters and looters attacking and setting fire to cargo vehicles, while blocking parts of the route. Other places affected also included Mpumalanga, and KwaZulu-Natal where several warehouses and businesses were looted, leading to shortages in the supply of goods.
These incidents were particularly significant given that South Africa has the largest road network in Africa and the 10th longest road network in the world. Its ports and road networks are vital to the supply chain of other neighbouring countries, such as Botswana, Lesotho, Namibia, Zimbabwe, and Mozambique
Consumer class grows
Despite these incidents across the continent, Africa’s consumer class and its purchasing power are also growing at a fast rate. By 2025, an additional 90 million Africans are expected to have entered the consumer class, with a combined purchasing power of $2trn.
The implications of this would be an increased demand in goods and services, which could put a strain on the supply chain across the continent. However, guaranteeing an uninterrupted flow of the continent’s supply chain requires addressing its governance and insecurity related challenges.
To do this efficiently and effectively, good and inclusive governance, which prioritises human beings and their wellbeing, is key.
Achieving Africa’s sustainable economic growth and development in the long term is largely dependent on credible governance that is built on fostering the rule of law, inclusivity, accountability, and transparency.
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