The year 2022 has kicked off with significant events in the economic arena. These events though seeming far away from the African continent which continues to grapple with reviving the economies battered by impact of the COVID-19 pandemic, are events that need to be monitored closely due to their potential to disrupt African economies all over again.
The Russia-Ukraine war which began in February is a war that has reaffirmed now more than ever that the world is really a global village. As the 2 countries assert their sovereignty through military might, the world is slowly coming to terms that being a spectator in this war is akin to shooting yourself in the foot today with an anticipation to run and win a marathon tomorrow. Totally hopeless! Russia and Ukraine are major exporters of key raw materials such as; cereals, iron and steel across the globe and with this invasion there are significant challenges in accessing these countries safely nor any assurance on the condition or reliability of the existing infrastructure. This invasion has disrupted supply chains thus demanding players to re-strategize, respond swiftly to the disruption, and rethink operations to avoid a bad situation getting any worse. This has brought to the fore the need to seek alternative sources from regional and global markets as an option in case of disruption and crisis.
The City of Shanghai in China reported its highest number of COVID-19 cases since the beginning of the pandemic, over 2 years ago. As a response, the city has been put in a city-wide lock down with residents being required to stay home. Shanghai Port is the largest Port in China and the world. Owing to the sheer volume of trade through this port and its effect on the local population, Shanghai has been designated as one of the 4 large port megacities across the globe. The Shanghai Pudong International Airport (PVG) is amongst the top busiest airports in the world and has dealt with flight cancellations and delays because of this lock down. These interventions have a ripple effect across the world due to delays for both importers and exporters from this world’s manufacturing powerhouse and creates further challenges for airlines and shippers in future.
Fuel shortages are being experienced in various African countries that have posed challenges in sectors relying on fuel in service delivery. In the month of April 2022, cargo transporters in Kenya were struggled to fuel trucks so as to move cargo leading to delays in collecting and delivering cargo to or from the Port of Mombasa. The situation, should it persist, could potentially lead to port congestion due to uncollected cargo and result in customer dissatisfaction emanating from service delays. Embracing innovation to determine solutions will highlight available opportunities such as use of alternatively powered trucks such as electric.
Perpetual disruption is now the new normal. Traditional approaches to trade have now been put to test. Supply Chain players will now need to develop contingency plans as a reaction to disruption in whichever form it presents itself. There’s need to reduce over reliance on traditional ways to access source and customer markets. Stability and business continuity will best be approached with a constant finger on the pulse and react aligned to the market dynamics.