Nimble, agile, progressive African leaders now have the rare golden opportunity to pitch for offshore business from global organizations post-COVID-19.
As the Covid-19 crisis dissipates, global companies with manufacturing supply chains in Asia will
fall into two camps. The first camp belongs to those that take the risk of not doing anything
about their offshore arrangements. They will close eyes and cross fingers hoping it won’t
happen again. The second camp will consist of firms that have heeded the lessons of this
crisis and will take steps to rewrite their contracts, relocate in order to avoid a repeat of the
same. Once beaten twice shy. These are the companies good and honest African leaders
should be talking to.
Opportunity For Africans
I believe Africa countries have a strong business case if the right minds are tapped into and
given latitude with no political interference. I hear you laugh! I don’t blame you. Start
thinking post-junta, post-dictatorship! The promises made by liberation movements to
peasants of taking over perfectly green manicured landscaped suburban houses should be
avoided at all costs. All energies were put into dislodging the colonialists without giving
a thought on how to govern efficiently and with integrity. For the past 40 years, we have been
reaping the pain of that chaos and the lack of preparation to manage the economy. Let’s not
repeat the same mistake!
There are vast and immense benefits to start thinking of getting a pie of global offshore
business, transfer of technology, the rebuilding of shattered economies, revitalization of roads,
the return of accountability as global demand transparency, the sanctity of property, and the list
goes on. As the political war goes on in the courts and in various constituent trenches,
talented minds and gifted hands should put their heads together on how to tap into this
once-in-a-generation-business-opportunity that can exponentially lift African living
“There comes a moment in every life when the Universe presents you with an opportunity to
rise to your potential. An open door that only requires the heart to walk through, seize it, and
hang on. The choice is never simple. It’s never easy. It’s not supposed to be.” – Jaime Buckley
Here is why I think west and a chance: the global demand for business process outsourcing
(BPO) services have been rising and projected to reach USD 343.2 billion by 2025, growing at
a CAGR of 7.4%. Global businesses are always in the market for reliable and sustainable
offshore outsourcing destinations. Of course, it is understandable that outsourcing
companies consider a myriad of factors, amongst which operational location is high on the
list. Organizations will always look for ways to reduce costs and given the presently available
technology it will be much easier to implement than years gone by.
We are now aware that the Covid-19 outbreak has affected supply chains and disrupted
manufacturing operations around the world. Thousands of companies have been forced to
throttle down or temporarily shut assembly and manufacturing plants in the U.S. and Europe.
Companies still have memories of the 2002-2003 SARS epidemic which started in the Chinese
Guangdong province led to 8,000 cases in 2003. At that time, the GDP of China represented
4.31% of the world GDP. By 2020, the number of detected cases of Covid-19 has already
passed 80,000 and China represents about 16% of the world GDP, an almost four-fold increase.
This throws spanners into future business considerations.
At the moment the vast majority of global companies have no idea of what their risk
exposure to what is going on in Asia actually is; that’s because few, if any, have complete
knowledge of the locations of all the companies that provide parts to their direct suppliers.
I understand the fear of supply chain disruption that stops countries from bidding, however,
it is common knowledge that when a disaster strikes, everyone suffers: buyers and suppliers
alike. African businesses should incorporate disruption-related metrics in their valuations of
suppliers. According to Harvard Business Review (March 27, 2020). “ when selecting a
supplier and writing the initial contract, many leading companies include language that
requires the supplier to participate annually in its supply-chain mapping efforts.
When force majeure events like the current pandemic strike, those supply maps can be used as a
roadmap to solutions to the crisis. (Suppliers in China made more than 3,000 force majeure
declarations during the first few months of the Covid-19 crisis.) Contracts should also spell
out expected recovery times and methods during such events” Coronavirus Is a Wake-Up Call
for Supply Chain Management by Thomas Y. Choi, Dale Rogers and Bindiya Vakil (March 27,
Time is limited and some opportunities never repeat themselves – Belle de Jour.
By Fraedrick Nyamhunga
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