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23 March 2014 | Gurjit Degun
Underdeveloped supply chains in Africa differ widely across countries and are a major challenge for retailers looking to move into the continent.
That’s according to Bart van Dijk, partner at AT Kearney and co-author of the African Retail Development Index, a new study designed to help retailers determine where and how to best enter Sub-Saharan Africa’s growing retail market. Rwanda, Nigeria, Namibia, Tanzania, and Gabon occupied the top five positions on the index.
“There are wide differences in infrastructure and supply chain development across African countries,” said Dijk. “Understanding the opportunities and limitations from country to country is a critical element of the retail expansion decision.”
The report added: “Supply chain remains a massive challenge in Africa. How to develop a supply base in Africa remains an open question.” It explained that a lot of the urban growth in Africa is “informal and uncontrolled”, which can put “overwhelming strains” on deliveries.
“Furthermore, supply chains undergo pressures that even the most seasoned supply chain professionals struggle with,” it said. “The route to market for products can involve any combination of rivers, mountains, deserts, jungles, floods, and drought, not to mention road and railway difficulties and governance issues that can stymie the transporting of goods across international boundaries.”