• Saturday, June 22, 2024
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BusinessDay

Unravelling the influence of neo-colonialism on African supply chains

Why Nigeria may lose $27.29bn funding for proposed Escravos Seaport

A few years ago, I needed to transport engines and some other materials by sea from the Cameron Port to Apapa, Lagos, Nigeria. I explored using roads, but the costs and risks involved were too much. I finally found a vessel, but it wasn’t going our route.

It took so long to finally get a vessel going that route and this struggle informed my research. Why is it so hard to move goods within Africa? One big reason is that there is poor demand. Many suppliers and buyers settle to get the goods outside of Africa first before transporting them to the desired African destination. This is because it is more expensive and brutally stressful to move goods within the continent.

One would wonder why this is so. Why should I transport a cargo from Ghana to Europe before taking it to Kenya? The simple answer is neo-colonialism. Before we dive into how this has affected trade, economies, and supply chains, let’s establish what it is and is not.

Read also: How to navigate the storm: Resilience and risk in the supply chain

Kwame Nkrumah introduced the world to neo-colonialism and defined it as developed nations indirectly controlling the underdeveloped. Many times, this happens through subtle political and economic policies. This web of control has permeated culture, trade, economies, and even the continent’s supply chain.

How does this affect trade and supply chains?

In one of my articles, I shared how the logistics framework of many African countries including their roads were not constructed to boost prosperity. Road networks are pivotal in any economy’s development because the prosperity of any nation or region is tied to how accessible supply is. However, many of the roads in Africa were developed during the colonial era to facilitate moving resources out of the countries and the continent as a whole. Although these countries have gained independence, the structures created make it almost impossible for intra-African trade and nothing has been done about it. Instead, the West is looking into creating more policies and unnecessary aids to further tie down intra-African trade.

We must be ready to make critical decisions, construct new roads with trade in mind, restructure our supply routes, and scrap economic policies that don’t serve the future Africa is seeking

Do you know that France has controlled the monetary policy of fourteen African countries that were formally its colonies for over seventy-eight years through the CFA Franc? These countries, as a result, rely on France for economic stability. A Harvard International Review states that one of the founding principles of the system was that colonies kept 50 percent of their foreign currency reserves in the French Treasury, plus an additional 20 percent for financial liabilities. Thus, member states only retained 30 percent of the reserve within their borders. How can a country bound by this rule truly thrive economically?

It’s not news that Africa remains a primary exporter of raw materials while importing finished goods, a pattern reminiscent of colonial times. This trade imbalance is due to the influence of neocolonial powers that have shaped Africa’s economy to suit their needs. The Democratic Republic of Congo, despite being home to vast mineral wealth, including coltan (used to manufacture electronics), remains one of the poorest nations globally due to unfair trade practices and complex supply chains controlled by foreign entities.

The situation is exacerbated by African countries’ continued reliance on foreign companies for transportation and logistics. These companies are often inclined to serve their interests over those of the African countries, leading to increased costs and inefficiencies. Countries like China are providing transportation assets and infrastructure to African nations and serving their interests.

Introducing the African Continental Free Trade Area (AfCFTA) is a significant step towards boosting intra-African trade and reducing dependency on former colonial powers. However, much more than this trade bloc, we must be ready to make critical decisions, construct new roads with trade in mind, restructure our supply routes, and scrap economic policies that don’t serve the future Africa is seeking. Supply chain only happens because of demand; people always want something. These are called demand signals. When the source of supply isn’t accessible to the market, there will be challenges. It is one thing to have road networks, it is another thing to shorten the distance between the market and supply.

Read also: Do Africans really care about a sustainable supply chain?

Is it possible to reshape Africa’s supply chains? Absolutely. However, it will not be cheap as the effect of neo-colonialism on African supply chains is deeply entrenched. For example Africa can improve its supply chains by improving road networks, clearing systems, container management, and port systems as these make importing and exporting commodities easier. An increase in exportation means more profitable growth for businesses and the ecosystems supporting trade.

Transforming the other logistical corridors, such as airway, water, and land, also encourages investors to bring in more goods and facilitates exporting more goods outside the continent. All these must be put in place quickly and sustained for us to see lasting results. Our work starts now.