Elaine Porteous looks at the procurement challenges facing Africa’s manufacturing sectors and highlights some notable successes.
Kenya, the hub of East Africa, has a well-developed manufacturing sector dominated by food, drink and
consumer goods. Agro-processing of wheat flour and maize meal milling
and sugar refining are the next main sub-sectors and Kenyan-based
companies have a strong capacity for innovation, partly thanks to a good
education system and a relatively workable transport infrastructure.
While the government is not totally stable, it has ambition. President
Uhuru Kenyatta said: “We want to make Kenya Africa’s gateway,
manufacturing and technology hub and a home to millions of
entrepreneurs.” He aims to reach double-digit growth by 2018 and trigger
an “industrial revolution” to become a middle-income country by 2030
and has launched e-procurement for the government to “more or less
eliminate abuse of our system”. Coca-Cola and its African bottling
partners are investing heavily, as is Pepsi, funding new manufacturing
lines and creating jobs and East African Breweries, a market leader and a
division of Diageo, embraces environmentally sustainable procurement.
Ethiopia and Mauritius
have a growing textile manufacturing sector with Swedish clothing
retailer H&M increasing its presence in Ethiopia, along with Tesco
Mauritius has special trade zones, reduced barriers to manufacturing and favourable tax options.
has a serious shortage of electricity, a poor infrastructure, frequent
regulatory changes and political instability. Despite all that,
procurement professionals are surprisingly cheerful and optimistic.
Ebute, head of supply chain for West Africa at Kimberly-Clark, has
reportedly said: “Ignore CNN, find credible local partners… look at
the growth rate, the awesome demography, the sheer size of the market
and most of all, the resilience of the Nigerian people.”
automobile manufacturing and cement sectors enjoy strong government
support and automakers there include Nissan, Mercedes-Benz and Skoda.
Procurement skill levels also compare well with more developed markets
like South Africa. General Electric, an American conglomerate, is
building a $250 million plant to make electrical gear and companies like
Nestlé, Unilever and Kimberly-Clark are active.