Africa’s value chain participation typically involves the export of raw materials to other parts of the world. However, in order to fully reap the benefits of the African Continental Free Trade Agreement, there is need for value addition, to strengthen value chains across the continent. In this interview, DevDispatch contributor, Oluwatobi Ojo spoke with Adebayo Adeleke, a supply chain analyst and Founder of  Supply Chain Africa, to discuss the regional value chain and its effects on the African economy.

Oluwatobi Ojo: Thank you for sparing a few minutes to speak with us. Can you introduce yourself?

Adebayo Adeleke: Thank you so much for the honour. My name is Adebayo Adeleke, and I am a supply chain professional with expertise in risk management, security and defence, geopolitics, indigenous supply chain, and trade. I am also a seasoned combat veteran of the United States Army with 20 years of service. 

Oluwatobi Ojo: As a supply chain expert, how would you describe the current state of Africa’s value chain and its potential?

Adebayo Adeleke: Africa’s value chain is inadequate. I agree that it is not where it used to be, but it could be better because Africa has not reached its potential. Currently, our value chain is skewed to pull resources out of the continent. Hence, we have not benefited as much from the resources the continent has to offer. Some of it is our fault because the infrastructure needed to retain some of the value chain has not been maintained, the ones that are needed have not been created because of all the other issues that are taking away from the infrastructural build.

The African Continental Free Trade Agreement was initiated to rebalance the value chain so that before resources are drawn out of Africa, a part of the value chain is restrained and retained. This way, Africa can call balls on strike when it comes to how the value chain of the resources that come out of the continent is structured. 

What we now require is balance and for the policy leaders to ensure proper structure. We also need to focus on infrastructural building as this will create opportunities for Africa to retain much of its value chain. 

Oluwatobi Ojo: The AfCFTA is expected to influence the global value chain. How/what do you think Africa can do to take advantage of the changing world order to reposition its value chain?

Adebayo Adeleke: As I mentioned earlier, when we start having infrastructure-stable power, road networks, and logistical corridors that lead to warehouses, take from places of scarcity to places of abundance. When there is healthcare and infrastructure, then investors will come. When there is stability in how we address all the facets of human security on the continent, people will come to invest, and when people come to invest, the African value chain will play a significant role in the global value chain. There will be a shift in production from Southeast Asia to Africa. 

A quick glance at the projection for the next 30 to 50 years, the youth population in Africa will overtake every other part of the world. The human capital of the world will reside in Africa, and labour will be at a reduced cost. To maximise the human capital, we must build infrastructure to retain a huge African value chain. The end state of the African Continental Free Trade Agreement is to encourage African countries to trade. For this to happen, we need infrastructure and the economic value systems of each country to align so we can get the best of the continent. 

I believe these are ways Africa can take advantage of the changing world order. Yes, the multi-polar world is creating a lot of vacuum, and there’s a shift from the manufacturing hub of the world being in Southeast Asia to the other parts. It is coming to South America, but Africa can tap into the shift. We have the resources and the human capital. It’s just the infrastructure build that is lacking. Once Africa can build and maintain its infrastructure and tackle insecurity, we will be on the right path. 

Oluwatobi Ojo: Industrialization is crucial to deepening the value chain. What’s your scorecard of Africa’s industrial output?

Adebayo Adeleke: African industrial output can be better. Africa used to export a lot of products, but because of the world’s needs and the structure of the global economy, many African countries now ship specific commodities only. Industrialization has left Africa behind because of our lack of infrastructure build. 

Even though graduates from African Universities are still holding their ground globally, our educational system can be better. The world is at Industry 4.0, but Africa hasn’t stepped into that because of what needs to happen. We need adequate power, water, and health infrastructure for Africa to posture for maximum participation in industrialization.

For example, there is a decentralisation of the global manufacturing hub but if we are not positioned to take advantage of the decentralisation when Industry 5.0 comes around, we will miss it. We must upgrade our systems and change how we do business, keeping in mind that these things help us compete in the multi-polar world.

 Oluwatobi Ojo: As a matter of urgency, what barriers must be broken immediately to improve Africa’s value chain? 

Adebayo Adeleke: Security. From my standpoint, human security should be the priority in Africa. Community security, political security, personal security, environmental security, health security, economic security, and food security.

Those are the expressions of human security plaguing the continent right now. Across this Sahara belt, coups have threatened political security, and with that economic security is in jeopardy, this trickles down to community security, health, and energy security. Nothing operates in a vacuum.

Oluwatobi Ojo: Most of the exports from Africa are usually in raw form. As a supply chain expert, what challenges have you identified? With value-addition across the continent, how can it be improved for greater efficiency? 

Adebayo Adeleke: When the African Continental Free Trade Agreement kicks in, many of these will be addressed.

What we should talk about is whether the raw materials we are exporting meet global standards and how to strengthen the logistic infrastructure we have because these issues make sourcing difficult. 

Oluwatobi Ojo: Finally, how can the private sector collaborate with governments to create a viable value chain?

Adebayo Adeleke: For greater efficiency, the private sector must collaborate with the government because the government cannot do most of these things alone. As the government provides conditions for private companies to thrive, the private companies must be able to share knowledge. When this happens, Africa will begin to get the best out of its value chains.