COVID-19: local implications of a global disruption


By Soromfe Uzomah

One thing we clearly see emerging from the global Covid-19 pandemic is that small and medium-sized business (SME) supply chains from central regions around the world have been severely affected at an unprecedented level and with a framework of unpredictable time for resolution as the virus continues to affect industrial production.

Companies that would normally import items to sell, particularly SMEs, are unable to continue business as usual due to business interruptions. So the question we must ask ourselves is, how do these SMEs make their supply chain fragile?

Digital commerce platforms and advancements in fields such as digital analytics and artificial intelligence can significantly help mitigate the risks of supply chain fragility. Flexible cloud computing solutions, data collection and analysis, and automation software can contribute to the success of SMEs in the digital age.

Cloud computing also gives companies the ability to cost-effectively scale to new markets. This is particularly beneficial for SMEs, which often lacked the resources or infrastructure to expand earlier. Partnerships with companies like Jumia in Kenya and Nigeria also make Microsoft products available to SMEs in local currency.

The challenge now is to establish new supply chain pathways within Africa. The African Continental Free Trade Agreement (AfCFTA) can play a role in unlocking innovation, growth and productivity on the continent, especially for its SME, the segment, by translating purchasing power into economic development.

To date, intra-African trade is relatively limited; UNCTAD, the main UN body dealing with trade, said it accounted for just 10.2 percent of the continent’s total trade in 2010. Between 2010 and 2015, fuels accounted for more than half of Africa’s exports. to non-African countries, while manufactured products constituted only 18 percent of exports to the rest of the world.

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By creating a single continental market for goods and services, the member states of the African Union hope to boost trade between African countries. Some studies have shown that by creating a pan-African market, intra-African trade could increase by approximately 52% by 2022, although these predictions are likely to be revised downward due to the influence of the pandemic on the local and global economy.

In any case, better market access creates economies of scale. Combined with appropriate industrial policies, this contributes to a diversified industrial sector and growth in manufacturing value added.

Digital platforms and the adoption of mobile technology act as effective conduits for the exchange of value, and by adding demand across the continent, these platforms provide small and medium-sized enterprises with opportunities to access new markets and offer or identify goods and services previously limited by location limitations and marketing costs.

These platforms create a diversification effect that increases the strength of supply chains. Startups like CoinAfrique, based in Dakar, Senegal, provide market access for SMEs through their free ad platform for new and used products, which allows users to earn money selling what they don’t use and find bargains.

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