THE LETTER FROM FRANCE SUPPLY CHAIN #27 - September 2022

The news of France Supply Chain this month is the holding of the board of directors on September 22 where it will be question of the first results of the launching of France Supply Chain international. This last one will be prolonged by a conference " GO TO AFRICA " on the evolution of the roadmaps of companies from a supply chain or local market share point of view.

Answering any question about Africa in a comprehensive way is a challenge.

It is important to be aware of the size of a continent larger than the combined surface of the United States, China, India, Japan and the whole of Western Europe with the United Kingdom.

Also it is a question of taking into account, for the 55 countries, the disparity of size, population, political and banking governance, life of religion, food self-sufficiency, access to the sea, reserves of raw materials "world", surface of arable land and forests, maturity in transport & logistics ...

This being the case, we can analyze some consequences of subjects that impact all countries, even in different ways.

1. The deterioration of China's domestic economic situation with its "Zero Covid" policy, which despite record trade surpluses, has led to a slowdown in investments and loans in Africa, mostly for infrastructure projects.
2. Russia's war against Ukraine, which is not recognized as such by the majority of African states, is affecting different countries in different ways. The weakness of cereal exports is especially affecting North Africa, led by Egypt, while the shortage of fertilizer is affecting Sub-Saharan Africa.
3. To date, Covid has had less direct impact than in Europe except in South Africa. Several reasons have been put forward without clear conclusions (youth of the population, means to fight known epidemics, resilience of the populations, ...). On the other hand, the attention that the majority of international groups have had to pay to the management of their Supply Chain, in their main geographies, has led them to put on hold a number of investments in Africa. For the record, Africa only contributes to about 3% of world trade, "this explains that".
4. Global warming, which has become undeniable, and the demographic outlook over the next 25 years (one generation to go from 1.2 billion inhabitants in Africa to 2.5 billion excluding the "catastrophe") will inevitably lead to massive population movements. The challenge for Europe, which remains Africa's leading trading partner, is to control these movements and therefore to deploy investment programs (envelope currently being released) in co-construction with investors/local entities to avoid uncontrollable migrations. These co-constructions should encourage the establishment of industries to replace regional imports on a model inspired by the European community. These require a quality intracontinental supply chain, which has made good progress in port infrastructures, except for multimodal containers, but which remains weak overall in downstream logistics infrastructures (warehousing and secondary distribution in corridors or on transverse routes to be created). The weakness is due as much to the lack of means as to the lack of players for a healthy competition.

In conclusion, it is difficult to draw a global development forecast, but we have seen a revival of roadmap studies by French and European companies in recent months. Even if financing remains expensive, will remain so for a long time and is limited in the face of an enormous investment need, opportunities exist. It is therefore necessary to find a way between an "Afro-optimism" tinged with naivety and an "Afro-pessimism" reflecting a lack of knowledge of local economies. This is the challenge of the discussions to be held during the conference on September 22 and through the Africa Chapters of France Supply Chain International!