Building Successful Supply Chains in Africa

August 8, 2014
Freight Truck Amidst Cars on Motorway in Johannesburg

This week on the margins of the U.S. – Africa Leaders Summit, I moderated a dialogue on supply chain management in Africa, hosted by GE.   The event highlighted the opportunities for African countries and U.S. businesses to work together to foster trade and investment.   Ministers from 12 African countries participated in the event, from North Africa to sub-Saharan Africa.  From the American side, we were joined by company representatives from Coca-Cola, the Gap, UPS, GE, Walmart, and Procter and Gamble, plus U.S. government agencies, such as the U.S. Trade Representative’s Office, USAID, and the Department of Commerce.  Two non-government organizations -- Global Fairness Initiative and New Markets Lab -- were also on hand. 

The event was an effort to reinforce President Obama’s message to African leaders about the mutual benefits of the U.S. -Africa trade and investment partnership.  It was a refreshing, candid conversation between some of America’s top companies and African countries interested in participating in global supply chains. 

U.S. companies explained how they go about making investment decisions and described what they are looking for in a foreign partner.  They emphasized a well-trained workforce,  regulatory issues, and the importance of regional economic links, which lead to economies of scale and deeper supply chains.  African officials in turn discussed their countries’ efforts to support and facilitate entry into global supply chain networks, and the challenges of making regionalization work for smaller countries.

The event showed that there are considerable opportunities for U.S. businesses and African partners in the development of the supply chain.  The U.S. companies have a wide range of business strategies, but all are were very interested in expanding their presence in Africa.  GE’s experience and leadership in the advancement of supply chains in Africa made it a fitting private sector partner to convene African ministers and senior officials, U.S. business leaders, and U.S. government officials. 

U.S. companies are committed to building successful supply chains in Africa.  At this week’s U.S.-Africa Business Forum, for example, Coca-Cola announced a $5 billion investment over a six-year timeframe that will improve their supply chain operations in Africa.  GE committed $2 billion by 2018 to advance infrastructure, skills development, and access to energy.

This discussion took place in Washington, but it won’t end here.  We look forward to continuing conversations like this over the coming months.  Our embassies and USAID missions in Africa are well placed and eager to support the effort.

About the Author: Catherine Novelli serves as Under Secretary of State for Economic Growth, Energy, and the Environment.

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