As a result of the disruptions caused by the COVID-19 outbreak, huge gaps exists in local supply chains for strategic products such as medical and food supplies in sub-Sahara Africa, and the Middle East and North Africa (MENA) region.
Countries in these regions have been over-reliant on global supply chains for access to many strategic products. And three quarters of African countries import pharmaceuticals and food products to fulfil existing demand and to bridge the gap of food insecurity.
Through imports, these countries overlook local and near-local supply chains to provide important commodities. Africa has the potential to solve food insecurity by developing a local supply chain to support agricultural activities from production to transportation to the market. The need for developing local supply chains and near local supply chains has been exposed vividly by the COVID-19 pandemic.
The COVID 19 pandemic has disrupted global supply chains for strategic supplies, such as pharmaceuticals and food products. Africa relies on pharmaceutical products whose raw materials are sourced in China and manufactured in India. Due to the COVID-19 pandemic, China and other countries shut down to reduce the spread of the virus. This caused shortages of important pharmaceutical products. The short disruption of the supply chain due to natural disasters necessitate developing local and near-local supply chains. Countries such as Saudi Arabia are looking into localisation and local manufacturers to solve challenges of the global disruption.
There are abundant food reserves globally, but food supplies such as wheat, rice, and other grains that are imported from international markets to Africa will decline. The coronavirus pandemic led to export restrictions, hoarding, and market closures and, therefore, it caused shortages of food supplies in some African countries.
Other global supply chain risks also disrupt logistic systems and supply chains. COVID-19 is just one example of a natural disaster that affects supply chains of critical commodities. Countries in the MENA region have, in the past, faced sanctions that limit access to pharmaceutical and food products. The sanctions have affected countries such as Iran, Libya and Yemen.
The United States imposed sanctions on Iran to limit financial transactions. Although, Iran produces mostly pharmaceuticals. Nonetheless, some advanced medicines which cannot be produced locally are imported. They face a challenge due to the sanctions, such are the disadvantages of relying on international supply chains. This creates a need to develop local and near-local supply chains to avoid disruption of the supply chain.
The need for developing local and near-local supply chains is created by disruption of the global supply chains. Global supply chains are exposed to numerous risks compared to local and near-local supply chains. And the COVID 19 pandemic is just an example of a natural disaster that has caused havoc in the global supply chains.
African countries and MENA countries are hugely affected due to the lack of a developed local or near-local supply chains. Development of these supply chains has the benefits of reducing lead times, reducing impacts of the interrupted flow of goods and material, flexibility, increased control, and sustainable supply chains.
Pahari, K. (2020). Impact of COVID-19 outbreak on supply chains, regional trade, markets and food security in East Africa. Nairobi: World Food Programme.