Africa 2024: Regional supply chain forecast to grow

You can also listen to this podcast on here.



Download the free LiSTN audio app on Google PlayApple or here.

JEREMY MAGGS: Alright, let’s move now from political forecasting to economic planning. Today the Johannesburg Chamber of Commerce and Industry (JCCI) is hosting an Africa 2024 event that it says is to spark Southern African economic revival. Now, given that the city of Johannesburg is the continent’s economic powerhouse, revival is in our best interest.

I’m in conversation now with Duncan Bonnett, who is first vice president at the JCCI. Duncan, you wouldn’t be hosting this event unless you were concerned about something. Where are we faltering in terms of revival?

DUNCAN BONNETT: Good afternoon. Yes, I think that there are quite a few different issues, but the key ones I think that need to be addressed, and addressed as a matter of urgency, include the regional logistics capacity, and that’s not simply for South African companies to export into the region but also to import from the region. We send far too many containers north of us that come back empty, and that ultimately has an impact on our competitiveness.

But other issues would include things like the border posts, we’ve seen what the delays and the blockages are, and that is a knock-on effect from the capacity that we have at our borders, but also some of the complexities around different countries and different systems, different requirements, different paperwork, and so on. So I think there are a number of issues that need to be looked at in that respect in order to build on what is already a fairly vibrant region.


SA to enlist private firms to ease border congestion

Beitbridge goes from worst to best border post in Africa

SA export route to Mozambique shut as violence erupts

JEREMY MAGGS: All of this, of course, absolutely critical to Johannesburg. As I mentioned in my introduction, we do to some extent still hold the mantle of being the continent’s economic powerhouse.

DUNCAN BONNETT: Absolutely. I think if you look at it, Jeremy, South Africa’s on course this year to export in excess of half a trillion rands worth of goods into the rest of Africa, and around about somewhere between 85% and 90% of that is into the rest of the SADC (Southern African Development Community) region in Southern Africa, and of that about 90% is value added.

So our factories, our businesses, whether they’re manufacturers or the service providers that underpin them here in Johannesburg, really do need and rely on the rest of the region for our well-being.

I think it’s obviously in our interest to see where we can work to make access into these markets a little bit easier.

JEREMY MAGGS: You’ve got some tough talking though, because we have complex challenges facing Southern Africa, global conflict, which has a spillover effect as far as we are concerned, regional instability. How difficult would it be to implement the kind of intervention that you’re talking about?

DUNCAN BONNETT: I think from a global perspective that’s global, there’s not a huge amount we can do, especially in the short term. But I think what we are seeing and what we have seen for a little while is that one of the knock-on effects of both Covid and the conflict in Ukraine, and now obviously with renewed conflict in the Middle East, is that project developers in particular, but businesses in general are looking to source from shorter supply chains.

So where two or three years ago, you may have had regular supply out of Asia, companies are now saying, well, we can’t afford to take that chance. We can’t afford to take those risks.

So there is already a movement towards shorter supply chains, regional supply chains, which I think is of benefit.



I think that there’s also a fair amount of work going on behind the scenes through our Department of Trade industry and Competition (dtic) through some of our embassies, our export councils, the chambers of commerce, Association of South African Chambers (Asac) to work together to understand what the immediate nitty-gritty requirements are and how we can look to implement measures that would mitigate the disruptions and the delays that we face.

JEREMY MAGGS: So Duncan, the sense I’m getting is we’re sitting or at least starting to bounce on a potentially interesting and beneficial springboard. So what would your advice be to business then? We’ve got the International Monetary Fund (IMF), for instance, projecting regional growth acceleration. So how should your constituency then be preparing to capitalise on this growth should it come?

DUNCAN BONNETT: I think that the answer to that is quite simple, is you actually have to just get out there. I know that that might be a little flippant, but the bottom line is global competition in Sub-Saharan Africa is intensifying, it’s intensifying literally on a daily basis from not just traditional competitors in Europe or in emerging Asia, but from the Middle East, from North Africa, from Latin America.

Companies really do need to do their homework, look at the opportunities carefully and then they need to actually get into those markets and fly the flag.

There’s no substitute for actually getting on a plane and going and visiting either project developers or potential importers and distributors in other countries and making sure that they understand who you are.

I think in the immediate Southern African region, South Africa is well known as a supplier, but the further north you go, the less apparent that is. From Joburg to Lagos is pretty much the same flight time as from Lagos to the UK. So once you get up to West Africa, people don’t have a focus on South Africa as a supplier.

So we do need to take a look from your own industry perspective, what products or services you offer, and then see where the best fit is over a longer term. The idea of parachuting in and out I think is gone. You need to start taking strategic decisions about countries, projects and opportunities that best suit your business and then pursue them and put the resources in that need to be put in.

JEREMY MAGGS: I think that’s very good advice. Someone was saying to me the other day that it’s a shorter flying time from Johannesburg to Lusaka these days than it is from Johannesburg to Cape Town. So some food for thought there. Duncan Bonnett, thank you very much indeed from the Johannesburg Chamber of Commerce.

Related post