Procurement, sourcing and import from Africa

Purchasing products or services seems easy, but this is not always the case. How do you know that you have the best deal, especially if you haven’t done much business before in Africa?

It already helps if you have a structured approach for your procurement and to keep your options open. Working with a local consultant or agency may help to identify more potential suppliers and to get the products that you just bought accross the border to their destination.

Find the right suppliers in Africa

Africa is the world second-largest and also the second-most populated continent of the world, with around 1.3 billion people. There are only few countries to be avoided. Most of the continent is stable, safe and business is flourishing. The growing middle class in Africa, mostly located in the bigger cities, has substantial purchasing power.

Natural resources supply from Africa

Africa is rich in natural resources, including minerals, oil, and agricultural products. Countries like Nigeria and Angola are major oil producers, while South Africa is known for its mineral wealth, including gold and diamonds. The continent also produces a significant portion of the world’s cocoa, with Ivory Coast and Ghana being the leading exporters. Sourcing in Africa can provide access to unique and high-demand products, but it also requires navigating complex logistics and regulatory environments.

Purchasing in Africa

Purchasing in Africa involves dealing with a wide range of suppliers, from large corporations to small and medium-sized enterprises (SMEs). The African Continental Free Trade Area (AfCFTA), which came into effect in 2021, aims to reduce trade barriers and increase intra-African trade, potentially lowering costs and increasing market access for purchasers. However, purchasing in Africa can be challenging due to issues such as varying quality standards, currency fluctuations, and differing business practices across countries.

Supplier search in Africa

Finding reliable suppliers in Africa can be facilitated by leveraging local knowledge and networks. Organizations like the African Development Bank and various trade associations provide resources and support for identifying and vetting suppliers. Additionally, digital platforms are emerging to connect buyers with African suppliers. For example, TradeDepot and Twiga Foods offer B2B marketplaces that streamline the supplier search process.

Procurement challenges in Africa

While Africa presents significant opportunities for sourcing and purchasing, challenges such as inadequate infrastructure, political instability, and regulatory differences must be addressed. Businesses often need to invest in building relationships and understanding local contexts to succeed. On the other hand, the continent’s young and growing population, increasing urbanization, and expanding internet connectivity offer tremendous potential for future growth in sourcing and procurement activities.

Select the right manufacturers and double check

Before you start ordering complex products or large quantities, make sure that you check your source. If you don’t go there yourself, then send somebody trusted, preferably who understands the local language and knows the local situation.

Check the export and import procedures

Import duties can limit the financial advantage of sourcing abroad. And customs formalities can further increase shipping times. Therefore check in advance whether the country that you are planning to source from and the applicable duties.

Shipping your products

If you purchase tangible products, you have to ship them out of the country. Depending on the country where you want these goods, this may have implications.

First of all you may have to pay import duties or settle VAT. There are certain thresholds for both of these charges, e.g. while importing in the EU you don’t have to pay import duties on any shipment worth less than € 150.

There may also be non-financial barriers, like certifications or approvals to be obtained. Especially for food, cosmetics or medicine this may be the case. Check this in advance, even before you invest in your marketing.

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A structured sourcing approach in Africa

Step 1

Supplier search

Try to identify in total 6 to 10 possible suppliers and check their websites. Approach them with a general request to see whether they have the products or services you need.

Step 2

Supplier selection

Submit your requirements to a group of three to five selected suppliers and ensure you get the right comparable quotations to make a choice. Negotiate with one or two of them to get the best result.

Step 3

Supplier management

Now start collaborating, making sure you have an efficient ordering process and limited risks where it comes to quality control and shipping the products.