One billion dollars. What does the mention of that amount do to you? For some it may be too big to process while for others the opportunity to get a piece of it or at least discover the story behind the number would be more overwhelming.
To break it down, that is the estimate value in monetary terms that is held in the value chain of the COMESA trade pipeline on a daily basis in form of transit bonds. An amount, if unlocked can be used to expand and grow the very same businesses that commit it to enable them trade across the region.
Just under one thousand trucks leave the port of Mombasa everyday destined for Kigali and Rwanda, meaning that they will have to pass through a myriad of weighbridges, roadblocks and border crossings. With each stop, the time variable grows and has a effect on the net cost of products at the end of the pipeline. This time variable can be quantified to the tune of USD 1,500 per truck per day. Consider that transport costs account for 45% in the final cost of goods for landlocked countries and that a one percent reduction in transport costs results in a 2% increase in trade and you may begin to see the bigger picture.
Once you digest the numbers, you begin to see the impact that ICT can have in Africa, more so in the quest to sort out our “good” problems such as food security and poverty reduction. Good problems because they can be addressed with relative ease compared to earthquake and tsunami type disasters.
Trade is one of the default sectors that we should focus on to get done and dusted with our developmental issues. Trade is powered by demand, supply and fulfillment . That there is demand for products is a non issue, as is the supply component. Where the greatest impact can be realized in using technology for trade is in the fulfillment, making it easy and seamless to get commodity A from point Y to Z ; removing duplicity of roles and the human element in business processes to reduce on corruption and human error, providing singular touch points for interactions in service delivery.
By deploying technology solutions in the trade sector we can greatly reduce the costs of goods which is currently a hot topic in light of the recent increase in the costs of energy, we can draw analytics that will identify bottlenecks in the fulfillment process and put costs to them that will enable us to draw relevant policy changes and even make us more competitive in trade.
Trade has been and still remains the backbone of economic development. Let’s trade more, let’s make the process a breeze.