Since 2015, the United Nations has been working toward Sustainable Development Goal 7 (SDG7), which aims to ensure access worldwide to affordable, reliable, sustainable, modern energy. SDG7 has particular relevance for sub-Saharan Africa, where 75 percent of the population lacks reliable access to electricity. The burgeoning economy is trying to attract investment, which is one reason why 24-7 power and connectivity are key to warehousing in Ghana, Mozambique, and Cote d’Ivoire.
Companies looking to do business in sub-Saharan countries such as Ghana, Mozambique, and Cote d’Ivoire need dependable power to support their logistics. As organizations embrace automated solutions and use data to drive their operations, they also want reliable digital connectivity. Electricity and internet go hand-in-hand in modern supply chain and warehouse management. That’s why 24-7 power and connectivity are key to warehousing in Ghana, Mozambique, and Cote d’Ivoire.
How 24-7 power and connectivity in Ghana, Mozambique, and Cote d’Ivoire warehousing modernize warehouse operation
According to the African Development Bank, Africa faces the largest man-made barriers to trade of any region in the world. Despite the obstacles, the US and other governments have pledged to continue economic engagement with African countries committed to self-reliance.
Importance of 24-7 power and connectivity in the supply chain
The purchasing power of Africa is growing rapidly, with a consumer market predicted to reach US$2.1 trillion by 2025. In the first ten months of 2021, US exports to Africa have increased 32 percent, and trade between China and African countries increased 40.5 percent in the first seven months of 2021.
Part of self-reliance involves the development of dependable electricity, which in turn lays the foundation for internet connectivity and industrialization. Internet access is especially critical to the development of e-commerce as well as construction of smart warehouses.
A warehouse management system that uses equipment and computers, instead of humans, to complete fulfillment and other operations is known as a smart warehouse. In other words, warehouse automation handles repetitive tasks, improving efficiency throughout the supply chain.
Although the US leads the world in warehouse automation, less-established markets such as the Philippines and Indonesia are catching up, according to the real estate firm JLL. Could the emerging markets of sub-Saharan Africa eventually follow suit?
In order to function, a smart warehouse must be able to connect to a 5G network. Reliable, secure internet is another reason why 24-7 power and connectivity are key in Ghana, Mozambique, and Cote d’Ivoire, and warehousing.
Already, high-speed subsea cables are improving connectivity for African coastal cities. In fact, a new submarine cable system across the Atlantic, MAREA, connects its hub in Spain directly to West Africa. This will facilitate high-speed data connections for warehouses in Abidjan as well as in Accra.
According to the Financial Times, African countries are among the fastest-growing internet markets in the world. This presents opportunity for companies that wish to lease warehouse space in high-growth Ghana, Mozambique, and Cote d’Ivoire. Interest in digital transformation is on the rise.
Advantages to 24-7 power and connectivity
Technology plays a role in facilitating the movement of goods in the African supply chain. In smart warehouses, automation and proactive inventory help streamline warehouse operations.
Plus, 24-7 connectivity speeds the transition from paper to electronic documentation, optimizing the supply chain. The automation and digitization of routine tasks also eliminates the middleman, which reduces the potential for corruption in facilitating the passage of goods.
How to identify challenges in 24-7 power and connectivity in Ghana, Mozambique, and Cote d’Ivoire warehousing
In Ghana, power outages are so frequent that there’s actually a word for them in Akan, a language spoken widely there. The word, “dumsor” (pronounced doom-sore), roughly translates to “off-and-on.”
Shortages in power supply
Like in many nations of sub-Saharan Africa, demand for electricity in Ghana outpaces supply. The country has made significant progress in increasing electricity generation and access over the last ten years. However, the electrical grid continues to experience high distribution losses.
Specifically, Ghana experienced a 23 percent distribution loss in the World Bank’s most recent analysis. This means that 23 percent of electrical output in Ghana did not get to consumers. Other nations in sub-Saharan Africa, such as Mozambique and Cote d’Ivoire, fared slightly better, with distribution loss percentages of 15 and 14 percent respectively. By comparison, both the United States and United Kingdom experienced distribution loss in the single digits.
Need for reliable power
Unreliable power can cost companies up to 31 percent in lost revenue, according to a Center for Global Development study. Specifically, companies involved with perishable goods must have consistent power in order to use cold storage. Otherwise, a power failure in a warehouse can destroy a company’s inventory and disrupt the supply chain.
One potential solution is the decentralization of energy grids, according to the US Agency for International Development. For one thing, solar- and wind-generated power can circumvent central electrical grids that may still be in development. In general, smaller, decentralized energy grids can help reduce cost and increase availability.
How to implement 24-7 power and connectivity in Ghana, Mozambique, and Cote d’Ivoire warehousing
To solve the issue of distribution loss and related issues, the United Nations is encouraging access to clean fuel and technology. Slowly, investment in support of clean energy is increasing.
Finding solutions through technology
The United Nation’s Sustainable Energy for All initiative reports a 46 percent increase in international financial flows to developing countries in support of clean energy between 2010 and 2018. Furthermore, it is developing countries that are installing the majority of new renewable capacity, specifically solar and wind technologies.
Recognizing the importance of why 24-7 power and connectivity are key in Ghana, Mozambique, and Cote d’Ivoire warehousing, Agility features renewable energy in all its warehouse designs. For example, Agility warehouses feature solar panels on rooftops as well as wind-driven roof fans. Skylights reduce the need for lightning electricity during the day. And indoor and outdoor LED lighting reduces energy use as do solar-powered street lights.
A study published in the journal Energy Economics in 2012 found that it would require a US$160–$215 billion investment to provide consistent electricity to sub-Saharan Africa. Since then, the International Energy Agency has found that the least expensive way to achieve universal electricity access is to use renewable energy sources.
Cultivating local employees
The emphasis on 24-7 power and connectivity in warehousing has helped Agility attract skilled staff. Its well-lit, attractive warehouses appeal to potential local workers.
In turn, this helps benefit the economy by improving employment opportunities, since Agility hires locally for its logistics parks. This directly contributes to the growth of a skilled local workforce, which eventually feeds back into local modernization efforts to upgrade infrastructure and bridge the digital divide.
How 24-7 power and connectivity in Ghana, Mozambique, and Cote d’Ivoire warehousing support African supply chains
In 2021, the African Continental Free Trade Area (AfCFTA) launched, boosting intra-African trade. AfCFTA creates a unified market of 1.2 billion people with a combined gross domestic product of $3 trillion. As a result, warehousing in Ghana, Cote d’Ivoire, and Mozambique affects other African countries as supply chains become more interconnected through the removal of trade barriers.
Importance of modern warehouses in the supply chain
Modern warehouse facilities help drive economic growth, creating the conditions for highly efficient supply chains, the CDC Group reports. In particular, Grade-A warehousing supply businesses with the infrastructure they need to grow. The Agility Logistics Park in Mozambique, for example, features warehousing with round-the-clock power, reliable internet connectivity, electrical power, and backup.
As a result, local and international companies have leased warehouse space. Oil and gas, automotive, electronics, and other companies use the facility for distribution, storage, assembly, and processing.
Cultivation of business opportunities along the supply chain
Stable power and internet form the backbone of supply chain management in the region. For instance, the French hypermarket chain Carrefour is expanding in southern Africa on the ground and in e-commerce.
The CDC Group report found that Grade-A warehousing improved tenants’ ability to scale and resulted in improved margins. For example, companies using Grade-A warehouses saved 45–60 percent on storage cost per pallet. Companies also reduced turnaround times and significantly reduced inventory losses.
Development of untapped resources to stabilize the supply chain
Mozambique experiences one of the largest electricity access deficits among countries in sub-Saharan Africa, according to Science Direct. However, the country is rich in renewable energy resources with the potential to become a regional energy hub, Science Direct found. Opportunities for investment and rapid economic development abound, holding promise for a robust supply chain.
How to find out more about warehousing in Ghana, Mozambique, and Cote d’Ivoire
Power and connectivity in the region are slowly improving. Contact Agility today to find out more about why 24-7 power and connectivity are key in Ghana, Cote d’Ivoire, and Mozambique warehousing. Agility’s logistics parks can solve your reliability questions and provide solutions in warehouse management.