Could Supply Chain Security Take U.S. Firms To Africa?

Authored by Ned Rauch-Mannino via RealClear Wire,

Beginning in August, China will levy export controls on two critical minerals: gallium and geranium. These metals are essential to semiconductor technology and restricting access to them marks Beijing’s latest volley in its strategic power competition with Washington and will significantly disrupt U.S. and Taiwanese chip manufacturers.

Authored by Ned Rauch-Mannino via RealClear Wire,

Beginning in August, China will levy export controls on two critical minerals: gallium and geranium. These metals are essential to semiconductor technology and restricting access to them marks Beijing’s latest volley in its strategic power competition with Washington and will significantly disrupt U.S. and Taiwanese chip manufacturers.

China also has a well-documented presence on the continent, driven primarily by the controversial One Belt One Road initiative. China stands as the largest trading partner for many African states, and its active engagement creates competition, particularly in areas such as mineral rights, port access, and government procurements.

For the American firms also interested in engaging Africa as a supply chain partner, support exists for their first steps.

During the past 20 years, U.S. government efforts have encouraged safer trade and investment conditions, and current initiatives such as Prosper Africa and Power Africa align American industry with tools like risk insurance, business intelligence, and matchmaking. The Africa Growth and Opportunity Act also adds import provisions, and the African Continental Free Trade Area’s further facilitates supply avenues and promotes trade through tariff removal between African states, regional cooperation, common rules, and regulatory reform.

Like any emerging market, Africa is not without risk. Undeniably complex, the varying challenges found in some countries include rapidly changing governance structures, political instability, stubborn trade barriers, and persistent corruption. Capital moves slowly on the continent, and results are less predictable. Flight scarcity, limited shipping routes, language barriers, and time differences also contribute to a difficult risk profile. Major and minor alike, these factors affect the calculus for market exploration.

The appropriate approach begins with recognizing every country presents a unique profile and determines reasonable expectations and timelines. Familiarity with Africa’s nuances is key, as is travel to the continent. Starting small, for example, through pilot projects or limited asset investments, can hedge risk. Adding Africa expertise to corporate teams could create conversations, identify potential obstacles, and preach patience.

Though Africa may not be an outright solution to today’s supply chain challenges, the continent deserves much more serious consideration from forward-thinking entrepreneurs who understand the constraints of a “single basket” approach. The case for Africa as a U.S. industry partner is stronger than ever, and for those bold enough to navigate Africa’s complexities the opportunity for two-way commercial relationships with a market positioned for growth is clear.