Transparency is transforming African supply chains
Small businesses are the lifeblood of the African economy, representing around 90% of all companies on the continent, providing roughly 60% of all jobs.
But a trading environment disconnected from international markets constrains any ambition to growth, limiting the prospects not only of business owners and their employees, but the entire continental economy.
Can a new era of tech bridge some of these gaps? We spoke to three of the continent's leading innovators - and participants in Afreximbank's Evolve initiative - to get a true picture of Africa's potential.
“When people use our pharmacies, they have access to primary care in a way they never had before, at a price they can afford,”
“When people use our pharmacies, they have access to primary care in a way they never had before, at a price they can afford,” says mPharma CEO Gregory Rockson.
The African pharmaceutical market is enormous, worth approximately $50 billion. But it is relatively under-regulated, leaving suppliers – or more to the point, opaque intermediaries – free to charge what they want. This, combined with unreliable supply chains, leaves many pharmacists understocked, with patients unable to afford what they do have.
mPharma has taken over procurement for hospitals and chemists in over seven countries, with a view to grow. With the collective bargaining afforded by such scale, the company has already driven drug costs down some 30%. With transparent pricing, mPharma hopes to enact a market shift, forcing others to match them. And by using historical data, the company ensures pharmacists always have what their patients need, without overstocks – lowering prices even further by virtue of efficiency.
With 100,000 patients currently benefiting each month, the impact is already enormous. But as the network expands, it has the potential to profoundly transform Africa’s economies. As Rockson says, “Healthcare is life. Without good health, people cannot be productive. Without productivity, economic growth is limited.”
But economic growth also hinges on trade, which in turn depends on cargo transportation. And that hasn’t always been reliable in Africa.
Kobo360 describes itself as the “Uber of logistics.”
You can’t always guarantee cargo will make it in Nigeria. Carrying cash for petrol and provisions, hauliers are a common target for criminals. And breakdowns are frequent, leaving vehicles stranded in the middle of nowhere. These factors and more have pushed the price of shipping to 62% more than moving a comparable quantity elsewhere in the world.
Kobo360’s CEO and Co-founder, Obi Ozor, is determined to change that. Kobo360 – currently live in seven countries across East and West Africa – describes itself as the “Uber of logistics” (Ozor is a former manager of Uber Nigeria.) And it works in much the same way, matching shippers with loads to drivers with trucks, using algorithms to maximize route and usage efficiency.
But it’s the real-time tracking that’s truly revolutionary. With 114 data points per driver, customers can see when there’s a problem so they can intervene – as can Kobo360. Although the company doesn’t directly employ the drivers, it does everything it can to ensure fulfilment, even sending repair crews out in the event of a breakdown.
And because the app is entirely paperless, threats to the cargo are reduced, providing an extra layer of protection to Kobo360 clients. While the drivers get paid more than in conventional logistics – 70% of the fare, rather than 30% – it is all safely hidden in digital wallets.
“always deliver on load requests at any cost.”
Trella is taking a similar approach in Egypt, the Middle East, and even further afield. Customers can book trucks using its app, but rather than matching shippers and drivers directly, Trella operates as a single point of contact between all parties, accountable for its 98% fulfilment rate.
In less than three years, Trella’s network of over 10,000 truckers has fulfilled more than 150,000 shipments, transporting over $1.3bn in goods. It’s a ringing endorsement of the company’s creed to “always deliver on load requests at any cost.”
This reliability is also rooted in data. Trella users have their own data dashboard covering a swathe of metrics from basic journey times to performance vs competitors, load/unload times, carrier ratings, and more. By arming its customers with this data, Trella does more than simply supply a haulage service – it helps its customers become more efficient.
In their own ways, these three companies are all using data to make logistics more affordable, efficient, and transparent. In doing so, they are untangling complexities that have until now prevented intra-African trade from truly flourishing.
While the AfCFTA lowers regulatory barriers, these Evolve participants are making the logistics required to physically transport goods between borders more accessible, unblocking the flow of goods.
When cargo flows freely, businesses grow. And as companies like mPharma so aptly demonstrate, that doesn’t just increase GDP, it has a tangible impact on people’s lives.
