Building Strategic Value in Procurement & Supply Chain in Africa: Trust as a Competitive Advantage

Supply chain and procurement roles in Africa are often misunderstood and underappreciated. Even more understood is the relationship between buyers and suppliers and the strategic outcomes of a strong professional relationship. The diversity across regions—whether in Zambia, Guinea, Ethiopia or Angola—requires a deep understanding of each market’s unique challenges and opportunities. With Africa’s economic trajectory on an upward path, it’s clear that the potential is significant, but success hinges on fostering mutually beneficial relationships between buyers and suppliers.

Africa’s economic growth is notable, with GDP growth across the continent projected at around 4.3% by 2025 (IMF, 2023). As sectors like mining, infrastructure, and energy expand, the demand for reliable, resilient supply chains only increases. The African Continental Free Trade Area (AfCFTA), aiming to create a single market for 1.3 billion people with a combined GDP of $3.4 trillion (African Union, 2023), will bolster trade and collaboration across the continent. In this setting, the connection between buyers and suppliers becomes invaluable, with suppliers often acting as “fixers,” providing not only products but solutions to complex challenges.

The Real Value of Suppliers as Problem Solvers

Traditionally, suppliers are seen as simply vendors or salesmen. Granted, many of these are exactly that - just salesmen. This is why it’s important to separate the wheat from the chaff, but more about that later in the article. However, real procurement experts have serious peripheral vision and vast insights that can benefit buyers. Suppliers in Africa frequently take on responsibilities far beyond delivering products, especially in sectors like mining, where uninterrupted operations are essential.

A McKinsey survey (2022) highlighted that 60% of African executives identified supply chain resilience as a top priority. This demonstrates the importance of having reliable suppliers who are prepared to step in and address challenges as they arise. Suppliers add value by being “on call” to solve issues and by becoming familiar with the operational nuances that can impact project success.

The Foundation of Strong Buyer-Supplier Relationships is the Trust

Trust is more than a nice-to-have in Africa’s dynamic business environment—it’s essential. Procurement professionals often rely on suppliers to troubleshoot, problem-solve, and advise on best practices. Trust allows for open communication, transparency, and a shared commitment to overcoming challenges.

According to Deloitte (2023), 75% of supply chain leaders in Africa view transparency as critical to resilience. For example, suppliers who offer transparent timelines and realistic projections can better manage expectations and avoid costly miscommunications. Trust in procurement means that buyers can call their supplier contacts not just to place orders but to brainstorm solutions to problems, turning suppliers into valuable partners in maintaining continuity and operational efficiency.

How Buyers and Suppliers Foster Strong Relationships

Mutually beneficial relationships between buyers and suppliers are not accidental but built on mutual effort. Here are some core strategies to look out for:

1. Transparency: Regular updates, straightforward timelines, and honest discussions about potential setbacks establish a foundation of trust.
2. Long-Term Commitment: Loyalty to a trusted supplier can help ensure priority treatment, especially during supply shortages or logistical challenges.
3. Shared Risks: By acknowledging and sharing risk factors, buyers and suppliers can better anticipate issues and work collaboratively to overcome them.

The mutual respect these actions foster is invaluable, turning suppliers from transactional vendors into strategic allies.

The Buyer-Supplier Relationship as a Strategic Asset

The benefits for buyers when working with a trusted supplier are clear—efficiency, cost savings, and problem-solving support. However, what’s often overlooked is that these partnerships offer sellers opportunities for sustainable growth and continued business. Both parties gain a competitive edge when buyers and suppliers understand each other’s needs and goals.

Trust-based relationships streamline procurement, reduce time spent on negotiations, and increase reliability. For buyers, this means smoother operations, greater peace of mind, and cost-cutting. For suppliers, long-term partnerships with dependable clients mean steady revenue and the chance to expand services over time. When buyers know they can depend on their suppliers to help them solve unforeseen issues, it uplifts the supplier’s role to that of a valuable strategic partner.

Trust as the True Value Proposition in African Procurement

Africa’s economic growth trajectory brings opportunities for those willing to invest in relationship-building and trust. Effective procurement partnerships are about more than cost—they’re about finding strategic allies to navigate the region’s unique challenges. A trusted supplier becomes a critical resource for buyers in maintaining efficiency and resilience. For suppliers, a strong relationship with buyers opens doors to ongoing business and the opportunity to deepen their regional expertise.

In the end, trust is the real currency in African procurement, and it’s the key to turning supply chains into strategic assets that benefit both sides, driving resilience, cost savings, and mutual growth.

References:

African Union (2023) The African Continental Free Trade Area: Economic Impact and Opportunities, African Union. Available at: https://au.int/en (Accessed: 29 October 2024).

Deloitte (2023) Transparency as a Strategic Asset in African Supply Chains, Deloitte Insights. Available at: https://www2.deloitte.com/ (Accessed: 30 October 2024).

International Monetary Fund (IMF) (2023) World Economic Outlook: Policy Pivot, Rising Threats, October. Available at: https://www.imf.org/en/Publications/WEO (Accessed: 27 October 2024).

McKinsey & Company (2022) Building Resilient Supply Chains in Africa, McKinsey Global Institute. Available at: https://www.mckinsey.com/ (Accessed: 24 October 2024).