Africa should embrace itself for expensive Xmas due to disruption in the global supply chain

Africa should embrace itself for expensive Xmas due to disruption in the global supply chain

The combination of many different factors has led to unprecedented disruption in the global supply chain never seen before which has increased the price of many products around the world.

Those factors include US trade with China which started in 2018 under the former US President Donald J Trump with the imposition of tariffs on goods made in China inviting retaliation from China of the same nature but it was the restrictions placed on technology transfers by the Trump administration that started real trouble especially for chips.

Then covid-19 happened in 2020 where almost all production in China come to hold sending shockwaves around the world although it was the spread of covid-19 around the world that gave many companies false analysis that there will be no market for their finished products since almost the whole world was living indoors and this was apparent with companies which makes cars as they canceled all their contracts with suppliers.

While many people were indoors across the world, ” the work at the home concept” was embraced forcing many chip-making companies to focus on chips that power electronics that would enable the working at home concept due to their unprecedented demand.

That meant that when covid-19 weakened and demand for other products like cars increased, there were no chips to increase production since most Chip making companies had changed and we’re focused on orders to produce chips that power electronics like computers, washing machines, smartphones, and other electronics leading to break down in global supply of same goods like cars.

The unprecedented demand caused many retailing companies to buy more goods which led to congestions at many ports hindering the supply of raw materials that would be used to produce other goods which are equally important and on high demand especially as we head for Christmas.

The evergreen container incident in the Suez canal also led to disruption of the global supply chain by cutting off Europe and the east especially China leading to not only the loss of billions of dollars in trade per day but also caused shortages of certain products.

Then there’s was Brexit where the UK broke away from the EU leading to shortages of drivers meaning that there is no drivers to pick from or take containers to ports leading to not only congratulations at ports but also empty supermarkets and break down in supply chain of other important parts of certain products assembled in other countries like China.

As disruption of the global supply chain continues, manufacturers are likely to put more importance on orders from the developed worlds like the US, UK, and EU which will undoubtedly leave Africa and many other developing countries waiting or be forced to buy the same products at a higher price due to competition from the developed world.

The constant breakouts of small clusters of covid-19 in some countries like China, Vietnam, and Malaysia which are essential to the global supply chain has made the matter even worse because of repeated lockdowns in those areas especially in China where there’s zero tolerance to covid-19 by the government.

I have tried three times to buy a new phone but all I find are the same old models like I bought one and a half years ago, this shows how disruption in the global supply chain can have far-reaching consequences even to small countries like Uganda.

This unprecedented demand and disruption in the global supply chain mean that many people living in developing countries like Africa or Latin America may not receive their desired products during Xmas or they may actually get them but at the increased price at a time when many people don’t have money due to not working since they have been at home in lockdowns.

The combination of the US-China trade war, Brexit, and the covid-19 pandemic has presented the world with an unprecedented breakdown in the global supply chain like never seen before and this breakdown is likely to take a long time to be resolved which will not only hinder global economic recovery but increased poverty especially in developing countries.

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