Africa briefing
June 2013
Executive summary
Global Risk Perspective
Drawing on data from leading supply chain risks
experts, this briefing identifies top line trends,
challenges and opportunities in African supply
chains with a focus on risk and performance
management.
In this briefing:
● The key challenges and risks affecting African
supply chains include conflict and corruption, an
uncertain regulatory environment, human rights
violations and climate change.
● Insights from Sedex on the most common supply
chain issues in Africa, which include a lack of
management systems; health, safety & hygiene;
wages and benefits issues.
● Contextual information to help companies working
in Africa to understand, monitor and manage their
supply chains risks and improve standards.
This report offers a generalised introduction into
the diverse African continent, which offers many
opportunities but also poses significant challenges.
© Maplecroft, 2013
Africa overview & key statistics
●2 largest and 2 most populous continent
●54 Independent Nations
●Split into Sub-Saharan Africa and North Africa
●Represents approx. 15% of the worlds population
●Worlds poorest inhabited continent
●Top industry sectors include: Agriculture; Mining and
nd
nd
Manufacturing
Africa
Population, total (millions)
Population growth (annual %)
2011
1,065
2.2
GDP (current US$) (billions)
1,874
GDP per capita (current US$)
2,922
GDP growth (annual %)
4.07
Life expectancy at birth, total (years)
57.5
Mortality rate, infant (per 1,000 live births)
58.2
Prevalence of HIV, total (% population ages 15-24)
4.3
Labour Rights and
Protection Index 2013
Extreme risk
>0.00 - 1.25
>1.25 - 2.50
High Risk
Medium risk
>5.00 - 6.25
>6.25 - 7.50
Low risk
>2.50 - 3.75
>7.50 - 8.75
>3.75 - 5.00
>8.75 - 10.00
Data source: Maplecroft: 2013
The case for rigorous human rights
due diligence:
●45% of the highest risk countries in the world for
Human Rights Risks are in Africa
●Labour rights:
60% of the worst countries worldwide for labour
rights are African; violations are particularly
prevalent against women and children
Sources:
Source: Sub-Saharan Africa and North Africa World Development
Indicators, The World Bank
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Sedex global statistics:
Significant challenges:
●
●
●
●Corruption: 49 African nations are rated as
>28,500 members
>150 countries
>
25 industry sectors based on the UNSPSC (United
Nations Standard Products and Services Code) listings
● >38,000 sites
● >37,500 audits
Sedex Africa statistics:
● Africa represents 7% of the total sites on the Sedex system
● S edex members are present in 29 African nations.
●44% of African sites are in manufacturing.
● 3 3% are large agricultural sites, and African members
represent 23% of agricultural sites globally.
● A frican members represent a total of 879,851 workers
(including permanent, temporary, agency, sub-contracted
and homeworkers), 43% of which are female.
● T he top 10 industry sectors in Africa on Sedex are involved
in growing or processing food / grocery products.
high or extreme risk for corruption and judicial
ineffectiveness, accounting for 60% of the
world’s most at-risk countries.
●Political violence: 38% of African countries
are extreme or high risk in this category,
accounting for 43% of worst ranked countries
globally.
●Regulation: 83% of African countries are
extreme or high risk within the legal and
regulatory environment
●Physical infrastructure: 80% of the world’s
highest risk countries for transport and
communications infrastructure are in Africa.
●Social infrastructure: 17 countries are at high
risk for the quality and extent of their public
education provision.
●Climate change: 9 African countries are at
extreme risk of water stress, with 60% of the
most vulnerable countries globally being African.
Source:
Africa opportunities:
●52 African cities with more than 1 million
inhabitants.
●$1.3 trillion of African consumer spending
forecast in 2020.
●1.1 billion working-age Africans (1/5 of global
total) projected in 2040.
●1.1 billion – the projected size of Africa’s middle
Eve Brand Farms, South Africa
class by 2060 (42% of total population).
●Opportunity to increase arable output - Africa
has 600 million hectares of uncultivated arable
land.
●Mineral rich - Africa has 95% share of the
world’s platinum group mineral reserves and
81% of estimated remaining phosphates
deposits.
●Commodity output: 73% of global cocoa
production is in Africa.
●Enormous resources for generating energy
in several forms but lack of infrastructure for
development.
(Sources: USGS, Standard Chartered Bank, United Nations;
African Development Bank; Deloitte; MGI; Global Insight)
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Top 10 supply chain issues - Africa
Category
Non-Compliance (NCs) Issue title
from the Sedex database.
% of all
issues in
Africa
Proportion
of African
issues against
the global
incidence of
this issue.
Management
Systems
A lack of proper code and system
implementation
6.3%
15.3%
Regular
Employment
Contract of employment
Absence of clear, understandable written
terms and conditions of employment which
comply with local law and are signed by
worker
3.8%
36.1%
Health, Safety
& Hygiene
Health & safety management
Provision of warning signs
2.2%
27.2%
Health, Safety
& Hygiene
Machinery
Lack of machinery safety guards
2.0%
8.5%
Health, Safety
& Hygiene
Chemicals
Absence of provision for safe handling/
storage/disposal of hazardous chemicals
1.9%
19.0%
Wages
Benefits including insurance
Legally required allowances, bonuses or
benefits are not paid
1.6%
Wages
Accurate / Understandable contracts
and payslips
Lack of clarity of payslips
1.5%
69.3%
Health, Safety
& Hygiene
Health & safety management
Health and safety representatives lacking
or lacking training or elected by managers
rather than workers.
1.5%
57.2%
Regular
Employment
Right to work
No documentation on file/ missing
documentation
1.4%
27.9%
Health, Safety
& Hygiene
Worker Health/ First Aid/ Accidents
1.4%
employment & wages) represent the
second highest group of NCs recorded
at 8.4%.
A lack of or improper implementation
3
of management codes or systems is
the highest occurring NC in Africa, at
6.3% of all single issues recorded.
●However, the proporation of
management systems issues from
Africa represent 15.3% of NCs recorded
globally.
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Rest
of the World
96%
Africa 7%
Rest
of the World
93%
Audits
Africa 4%
Rest
of the World
96%
31.0%
●1600 audits, representing only
African issues in the Sedex system - Key points:
2Labour standards issues (regular
Africa 4%
6.7%
Sample size: 1600 audits
Compliances (NCs) as a group is the
single largest %, representing 8.9% of
total issues recorded in Africa.
Workers
Sites
A lack of signage or workers untrained to
recognise signage in hazardous situations.
Health, safety & hygiene Non1
Sedex System –
Africa comparison
●The second highest single issue
recorded concerns a lack of formal
or official contracts and terms
and conditions of employment for
workers at 3.8% of issues raised in
Africa.
4% of the audits on the Sedex
system are from African sites,
however these audits contain
8% of NCs globally.
●5% of Overdue NCs are from
African audits.
●On average African NCs take
22% longer than the global
average to close off NCs.
●Wages - specifically a lack of clarity of
payslips - is a widespread NC issue in
Africa, representing 69.3% of issues
raised globally.
●It is important to note that health,
safety & hygiene issues are often
more obvious in audit compared with
more subtle issues such as corruption,
discrimination etc.
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About this briefing:
This regional briefing is the latest in a series of films, publications,
resources, briefings, webinars and in-person events by Sedex
Global and partners. These focus on a range of topics including;
key emerging trends for sustainable supply chains by region and
emerging CSR topics, and risk and performance management
in global supply chains. The briefing highlights companies’
achievements of good practice, best practice, their impact,
collaboration and convergence in responsible business.
Find out more at:
www.sedexglobal.com/insights/briefings
“
Partner Africa has found time and time again that
to deliver true step change and significantly improve
compliance with international labour standards, African
producers/owners need to embrace a change of
mindset.
This means understanding the business case and
benefits of being ethically compliant e.g. improved
productivity, improved staff retention, improved
safety, less absenteeism, reduction in environmental
impact etc., rather than seeing audits and compliance
as something that is being imposed on them by
international buyers.
”
Lara Ladipo, Executive Director, Partner Africa
“
It is becoming increasingly obvious that sustainable
growth can only be achieved through paying greater
attention to the world around us than has been the
case in the past. The links between economic growth,
transformation, poverty alleviation, the environment and
climate change can either form a vicious or a virtuous
circle.
”
Simon Susman, Chairman, Woolworths
Holdings (Pty) Ltd
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About the partner author
organisations:
Sedex Global (sedexglobal.com)
Our mission is to drive collaboration,
increase transparency and build the
capacity that’s needed to raise standards
across all tiers of the supply chain. We offer
the world’s largest collaborative platform for
managing and sharing ethical supply chain
data, along with leading-edge services
which multi-national companies use to
understand, monitor and manage supply
chains risks and improve standards.
We collaborate with a range of stakeholders
including UN bodies, trade organisations,
government agencies and NGOs to share
insights and promote best practice on
responsible supply chain issues.
Sedex provides in-depth, analytical
reporting services to highlight trends, alert
potential risks and help prioritise resources.
Find out more: http://www.sedexglobal.com/
member-services/reporting/
Maplecroft (maplecroft.com)
Maplecroft is a leading risk analytics,
research and strategic forecasting
company. We offer an unparalleled portfolio
of risk indices, interactive maps, expert
country risk analysis, risk calculators,
scorecards and dashboards. These
technological solutions identify emerging
trends, business opportunities and risks to
investments and supply chains worldwide.
Disclaimer:
All data correct as of 20th May 2013.
© Sedex 2013
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