Strategic Sourcing is key to industrialisation in Africa
Perceptions versus realities: The role of procurement in Africa’s long-term socio-economic development
Strategic Sourcing is key to industrialisation in Africa
Perceptions versus realities: The role of procurement in Africa’s long-term socio-economic development

The role of women in the long-term industrialisation of Africa

Women have more power than they think. This is especially the case when it comes to their influence on long-term industrialisation and socio-economic growth in Africa.

As consumers, either at an individual or organisational level, women’s buying and sourcing practices – no matter how large or small – impact on the success and failure of local, regional and continental economies.

Where, and from whom women choose to buy their consumer or business products has a significant influence on continental value and supply chains.

In order to harness the power of their collective spending as a means to economically benefit the region as a whole, women need to begin to adopt and promote a form of strategic sourcing.

Strategic sourcing is related to the procurement process of supply chain management. Supply chain management can be understood to involve the strategic management of the various entities of a value chain. Procurement, a process within supply chain management, comprises the acquisition of tangible and intangible goods for consumption within and beyond an organisational value chain.

Strategic sourcing is a sub-process of procurement and assists in among other things, searching for and obtaining real value for each acquisition.

Strategic sourcing is coined strategic for a number of reasons. To begin with, it is long-term focused. That is, sourcing is based on the long-term benefits for the organisation and supplier. Next, it is an important process in the leveraging of organisational spend, especially in developing economies. And, most importantly, it is not simply focused on the costs of sourcing a good or service, but rather considers the total acquisition cost of ownership to an individual, company/organisation, industry and society.

The total acquisition cost of ownership is fundamental to strategic sourcing. Total acquisition cost of ownership involves a consideration of not just the price of a unit being acquired, but a number of related factors. For example, it looks at: what is being bought, where the unit is being bought from, why the unit is being bought, why the unit is being bought at a particular price and at a particular time, who the unit is being bought from, who is buying the unit, how many units are being bought, and what the acquisition cost is, among other things.

Paying slightly more for regionally made and sourced goods will not only lead to lower prices in the medium- to long-term, but it could also boost productivity, accelerate industrialisation, and support long-term job creation on the continent.

While the concept of strategic sourcing may seem business-focused, it can and should also be applied to individual or personal buying behaviours. By sourcing strategically women will be able to leverage their spend to benefit their community, society and region as a whole.

Many African consumers are unaware of where the products they buy originate from. Over 90% of the clothes worn in Africa are imported, over 85% of the footwear worn in Africa is sourced from outside the continent, and over 78% of goods and services bought by the public sector originate from outside of the continent. In addition to food and clothing, other key economic sectors demonstrate a similar pattern. For example, over 70% of bulk pharmaceuticals, vaccines, nutraceutical and cosmeceutical needs are sourced from outside the continent and over 70% of the content in educational textbooks comes from outside the continent.

These statistics mean that instead of adding directly to economic development and job creation on the continent, African shopping habits tend to focus on short-term price gains and neglect long-term continental industrialisation and wealth creation.

Understood as the large-scale value addition of resources through manufacturing and other advanced innovative technical means, industrialisation offers numerous long-term benefits including wealth creation, increased trade in non-commodity products, a rise in living standards, increased entrepreneurship, the generation of resources to upgrade and build required infrastructure, a reduction in inequality, and job creation, to name but a few.

One of the major causes of de-industrialisation is that instead of supporting locally produced products and services – albeit slightly more expensive – Africans continue to rely on cheaper imports to support their consumer and business needs. This is because, as with most acquisitions in Africa, unit price is often the first consideration before anything else. So, despite local production of various goods and services, people continue to search the market for cheaper (often imported) alternatives.

Sustainable industrialisation can only be achieved through local and regional wide consumption practices. And women play a vital role in these practices.

In order to fulfil this role women can begin to harness the power of their spend and contribute towards the long-term industrialisation of Africa in three ways:

To begin with, and at a personal level, women need to begin to consider where the products and services that they are buying originate from and actively look to support locally, regionally and continentally produced items. That is, they need to source strategically. They should also encourage their children, families, and communities to do the same.

At an organisational level, women in business need to promote “Made in Africa” products and move away from proudly country specific initiatives. They need to invest in infrastructure where possible, and look to focus on the long-term implications of their sourcing practices. Moreover, they need to move away from just buying and towards strategic sourcing. This will help to reduce the short-term price gain – long-term value erosion pain syndrome.

Finally, women in business, and particularly in the supply chain management field, need to support the professionalisation of the procurement aspects of supply chain management. One way to do this is to encourage affiliation with the Chartered Institute of Procurement and Supply (CIPS) – a globally recognised professional body.

Women, and their selected sourcing practices, play an important role in unlocking Africa’s economic potential, and it is through their support and adoption of strategic sourcing practices that industrialisation and poverty alleviation can begin to be achieved on the continent.

Prof Douglas Boateng
Prof Douglas Boateng
(MSc, EngD FCILT, FCMI, FIoD, FIC, FIOM FCIPS) Founder AND CEO – Panavest International and partners and President of the Panavest Foundation

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