Origins: Mapping Africa’s supply chain history

The rapid evolution and sophistication of technology sometimes make us forget the significant progress we have made as a race in the last few decades. Just two decades ago, for instance, Nigeria’s movie and entertainment industry depended on a strong movie distribution network across the country to sell its cassettes and DVDs. Now, the audience can enjoy movies and listen to Afrobeats music in the comfort of their rooms anywhere in the world. 

This shows how the sophisticated people logistics and core supply chain we see today are not as old as we tend to assume. As Africans, we still hear stories of how people who died a few decades ago moved on foot over a long distance to trade or for several purposes. My great grandfather, with his group of Muslim faithfuls, travelled to Saudi Arabia to perform Hajj, the annual Islamic pilgrimage to Mecca, on foot. Many of them died on the journey, and it took most of them more than five years to come back. They narrated how they came back with entirely new skills that they learnt in the respective towns they rested in to make enough money to continue the journey for a while. This was the early 1940s. 

Trans-Saharan Trade

Just like my great grandfather in the mid 20th century, the Muslim king of the Mali Empire, Mansa Musa, made a pilgrimage to Mecca six centuries earlier, showing how old African people had been moving people and goods within and without the continent. Only that, unlike my great grandfather, Mansa Musa, according to Harvard University’s Dr.Emmanuel Akyeapong in his Afrexibank commissioned book, History of African Trade, “…was accompanied by 80 to 100 camel loads of gold and a personal entourage numbering in the thousands.” This made his journey faster as he returned to Mali in 1325, a year after he started his journey. 

Before any contact with the Europeans and the advent of large-scale slave trade, Africans had developed trading routes that spread across the Sahara and then linked the north of Africa. Africans majorly traded gold and salt with other old civilisations like India, China, and the Middle East. Some Western African empires such as Ghana and Mali were said to have amassed so much wealth from their gold mines. Mansa Musa of the Mali Empire is still rated as the richest man ever due to the wealth he amassed from the gold trade he oversaw as a king. Ivory, metal goods, kola nuts, beads, clothing, etc. were some of the other items commonly traded by Africans.  

Some of the items traded by Africans and their origins

Source: History of African Trade: Harvard University. 

The development and spread of trade among Africans led to the emergence of prominent cities that served as trade centres across the regions. Western Africa had Timbuktu Djenne, Agadez, Gao etc. North Africa, due to its closeness to River Nile and others, developed seaport cities along the coast such as Marrakesh, Tunis, and Cairo. 

 Africans also moved people and goods across water over long distances. Before any significant contact with Europe, coastal trade traversed Ivory Coast through the coast of Guinea and then to the channel in Lagos. This lagoon network was so vast that when the Portuguese arrived at the Gold Coast (present-day Ghana) lanbens and Aljaravais, which were textiles made in North Africa, were a common sight. Also exported from Benin (southern Nigeria) to the Gold Coast, at this time were blue cloth and beads.

Trans-Atlantic slave trade

A crucial event that spotlights how the slave trade was a business and economic adventure particularly for Europe was a treaty signed by Britain and Spain in 1713. Tagged Asiento de Negros, the agreement was to grant Britain the monopoly over the slave trade in Spanish colonies in Africa. The contract that was to be executed by the South Sea Company, a British company where Queen Anne (queen of Britain and Ireland from 1702 to 1714) had about 22.5% equity, ensured that the British supplied 4,800 enslaved Africans to the Spanish colonies for an initial 30 years.

The supply chain organization of the slave trade lay in how the trade in slaves was coordinated from Europe to Africa to the New World or Americas and then to Europe. In what is now called the Triangular Trade, trading ships sailed from Europe with arms and manufactured goods such as textiles and wine to Africa. In Africa, they transacted with native slave traders by exchanging these items with enslaved Africans and then left the continent with the slaves to the Americas or Caribbean. The ships finally journeyed back to Europe with raw materials meant to power the European industrialization and items for consumption such as sugar, rum, and tobacco

The slave trade led to the development of ports dedicated to the export of slaves and the import of the items exchanged for them. Some of the ports developed were Ouidah, Lagos, Aného (Little Popo), Grand-Popo, Agoué, Jakin, Porto-Novo, and Badagry. The trade also led to the rise of states such as Segu and Dahomey whose economy and politics were hinged on slave trade. 

By the end of the slave trade in the 19th century, over 12 million African slaves were reported to have been transported across the Atlantic Ocean to the Americas or Caribbean. In their Atlantic Slave Trade Database, David Eltis, David Richardson, and others estimated that over 35,000 voyages were completed from the sixteenth through the nineteenth centuries.

Colonial Africa

The British first abolished the slave trade in 1807, but it wasn’t until 1838 that it ended in British colonies. Spearheading the movement that led to the abolition of slave trade gave the British the moral grounds to lead the scramble for and partition of Africa that followed a few decades later. Precisely at the 1884 Berlin Conference, the British awarded itself about 30% of the African states. The major motivation was to ensure a continuous and cheap supply of raw materials that the industrialising Europe needed and that Africa had. With colonialism, the power to decide what to produce and what share should be consumed internally or exported was forcefully transferred to the colonial powers. 

Unlike during slavery when the Europeans stayed at the ports and depended on African warriors or traders to supply slaves, they now penetrated, conquered, and enforced their rule over all their colonies across the continent. In Nigeria, a major colony of the British, the colonial administration developed ports, waterways, and railways to ease the administration of the colonial territories and also to easily move raw materials across the country and then to the ports for export to Europe. 

In southern Nigeria, where water bodies are abundant, the British administration exploited the waterways to move goods across. In the 1913 Colonial Report on Southern Nigeria for instance, cargo traffic spiked to 1,380 tonnes from 148 tonnes the previous year. And in 1955, the inland waterways across the colony had been developed that it spread across about 10 million ton-miles and transported 150,000 tons worth of cargo. According to a 1955 report by the International Bank for Reconstruction and Development (now The World Bank), the Lagos-Epe section alone accounted for 80,000 tons of cargo because of its proximity to the Lagos port where the goods were taken to Europe. 

Railways were also well developed. Successive administrations in independent Nigeria, especially the present Buhari administration, are only upgrading or modernizing the railway infrastructure built by the British colonial administration for their economic interests in the country, which were majorly to transport raw materials to the ports for export. In Northern Nigeria, for instance, the worth of the exports significantly increased (by over 150%) after the region was linked by rail in 1913. In the colonial report for the region for that year, the value of Tins moved from £181,759 in 1911 to £568,428. For Ground Nuts, it jumped from £10,377 to £174,716 and hides and skins the value spiked from £37,809 to £197,214. Essentially, the value of exports which was only £889 thousand at the beginning of the 20th century multiplied almost 20-fold to £19 million by 1937 when most of the railway infrastructure had been built. 

It is the same story across the other colonies of the British and other European powers that controlled one colony or the other. The colonial powers were influenced by the economic interests or needs of their home countries and thus invested in areas where the colonies had a comparative advantage. In some cases, the “settler” colonies appropriated land for European use. In “peasant” colonies, land was preponderantly controlled and cultivated by Africans while in “concession” colonies, land was allocated to mining and plantation companies of European origins for use. With these methods, agricultural export was popular in West Africa while mining and export of gold, diamond, and other gemstones were largely obtainable in southern Africa. Just like Nigeria, they also invested in transport infrastructure to the extent that it can move the goods to the ports for export. 

Foreign investment in sub-Saharan Africa, 1870–1936 (In nominal British pounds)

Source:  The Economics of Colonialism in Africa by Gareth Austin. The Oxford Handbook of Africa and Economics

After the Second World War (coupled with the rise of African nationalism by the elites who had been educated abroad), the European approach to African economic development began to shift. During the war, expatriate companies such as the British United African Company (previously Royal Niger Company and now Unilever) began to manufacture locally goods that they used to import from Europe. That was because the war necessitated prioritizing the shipping space for transporting those goods such as textiles, canned food, beer, etc. to the war front instead of Africa. This trend began to gain momentum into the 1960s when most of the African countries were gaining independence and charting a new economic and industrial course for their respective countries.

Post-colonial Africa

A summary of the politics and economics of colonialism by Harvard University’s Dr. Emmanuel Akyeapong in his book earlier referenced gives an idea of what was meant to follow when the power dynamics began to change. 

“Economic policy is reduced to rudimentary procedures of gathering crops and bartering them. Moreover, by strictly imposing on its colonial “dependency” the exclusive consumption of its manufactured products, the metropolis prevents any efforts to use or manufacture local raw materials on the spot, and any contact with the rest of the world. The colony is forbidden to establish any industry, to improve itself by economic progress, to rise above the stage of producing raw materials, or to do business with the neighboring territories for its enrichment across the customs barriers erected by the metropolitan power.”

From the foregoing, it is evident that the expectation for an independent Africa was to move away from the extractive policy which only sought to mine raw materials for export to manufacturing or industrializing one which adds value to these raw materials and builds specializations based on areas of comparative advantage. How has that panned out so far?

Relying heavily on the production architecture created by the colonialists and due to the dearth of transformative leadership, the continent still largely remains a primary commodity producer. In Nigeria, Africa’s biggest economy, crude oil export accounts for over 50% of government revenue in the last five years (dipped due to low oil prices) and represents 80% of Nigeria’s foreign exchange earnings as well as 30% of banking credit, according to the World Bank.

Africa’s share of global trade has relatively remained the same since its independence. It was 3% in the 1950s when African primary exports were in high demand; it was about 3.3% in the 1970s; it dipped to 2% in the 1990s after the Asian Tigers industrialization drive chopped off Africa’s thin manufacturing base, and it is currently 1.9% according to the AfDB.

Manufacturing in selected African countries, 1960

Source: The Economics of Colonialism in Africa by Gareth Austin. The Oxford

Handbook of Africa and Economics

Although at different stages of development, the continent has adopted many modern supply chain infrastructures. Air transport (to move people and cargo) has continued to deepen across the continent. A 2019 World Economic Forum report estimated African airports to be 731, airlines to be 419, jobs created to be 6.9 million, and $80 billion in economic activity. Water, road, and rail transportation has also been developed to cope with the developing supply chain needs of the continent. Africa has over 100 port facilities, accounting for over “6% of the worldwide water-borne cargo traffic and about 3% of the world’s container traffic.” Multinational FMCGs such as Coca-Cola, Nestle, Unilever, etc. have exploited the intra-African road and rail network to deepen Africa’s supply chain and distribution. 

For instance, South Africa, the continent’s second-largest economy, in 2019 alone transported about 175 million passengers and moved over $3 billion worth of cargoes through its rail lines, according to the country’s statistics office. The expansion of e-commerce across the continent has also disrupted the distribution channels initially controlled by the traditional logistics companies such as DHL, Nipost UPS, etc. New e-commerce champions that are heavy on fast distribution and delivery, such as Jumia, which operates in many African countries and is now one of the continent’s few tech unicorns, continue to revolutionize supply chain in Africa.

Although primary extractive products still dominate African external trade, the African trading partners base is being diversified. For instance, the UAE ranked third in Ghana’s “cumulative value of foreign direct investments” from 1994 up to 2011. China’s trade with Africa spiked from $7.3 billion in 2000 to $135.9 billion in 2015. India imports over two-thirds of its oil from the continent especially Nigeria and in return exports pharmaceuticals, transport equipment, textiles, etc. to Africa. 

Regional trade has only dragged along the years. Data from COMTRADE shows that trade among ECOWAS countries in West Africa for instance has historically ranged from 10 to 15% even though the massive contributions it makes to small countries shows the huge potential if it is well developed – it represents 78% of trade in Burkina Faso’s trade, 60% in Togo, 46% in Senegal, and 35% in Mali. 

That is why the signing of the AfCFTA holds a lot of promise for the integration and development of intra-Africa trade and supply chain. The AfCFTA is forecast to boost Africa’s income by $450 billion by 2035 and improve Africa’s exports by $560 billion, mostly in manufacturing, according to the World Bank.