Leveraging partnerships to reach the last mile in Africa

Village in northern Uganda

By ThirdWay Africa

In Africa, last-mile distribution continues to be one of the biggest challenges that governments, donors and firms face when attempting to deliver products and services at scale.

The challenge is particularly acute in rural areas, where infrastructure and connectivity are often poorer and educational levels lower. Cultural and language differences between regions, along with more recent challenges brought by the Covid-19 pandemic, further complicate matters.

Technological advancements have helped reduce the pain. For one, increased access to mobile phones, televisions (standalone pay-as-you-go solar TV systems have become particularly popular in rural areas) and the internet among average households have eased the constraints on the distribution of content, information and services. The rise of mobile money, as we demonstrated in one of our previous insights, has also enabled governments and firms to more easily and efficiently distribute their services to customers across the region.

Delivering the last mile requires a strong local presence

But the reality is that for many parts of Africa, last-mile distribution still requires a strong local presence. For starters, low literacy and educational levels mean text messages and phone calls are often an ineffective means of reaching customers. This is particularly true when delivering products or services of greater complexity such as financial services or vaccines. In these cases, knowledge dissemination is often best performed by field agents who have strong ties to their local communities and are well trained on the product or service.

The need for a strong local presence also applies to the physical distribution of products. Given that many rural communities are spread out and hard to reach, organisations must develop vast hub and spoke distribution networks, where the hub is often a shop in a major rural town and the spokes a combination of stock points and field agents.

Example of hub and spoke network. Source: TWA Analysis

Such a reality means that effectively reaching the last mile requires significant time and investment to build out distribution infrastructure and agent networks that are specific to each region, county and local village. Time and patience are also required to refine and optimise these networks to ensure the product is in the right place at the right time for all potential customers, no matter where they are, what language they speak or what their educational level is.

Naturally some organisations have been loath to build out bespoke infrastructure from scratch – especially organisations delivering low margin products or public goods. As a result, many have chosen to partner with multinationals or large distributors that have both the experience and infrastructure to deliver the last mile at scale.

How partnerships can be a strategy for success in the last mile

There is a popular African proverb that goes “if you want to fast go alone, if you want to far go together”. In the context of last-mile distribution, such wisdom is fitting, where partnerships are often essential for reaching the majority of households.

Project Last Mile, a partnership between USAID, the Bill & Melinda Gates Foundation and the Coca-Cola Company, which was launched in 2010 and has expanded to multiple countries across Africa since then, is one example of this in action. To date, the project has leveraged Coca-Cola’s marketing and distribution supply chain expertise across the region to work with local governments to increase awareness and deliver medical treatments and prevention programmes across several countries, including Mozambique, Liberia and South Africa.

Startups have taken similar approaches to scaling up their operations quickly and cost effectively, particularly in light of headwinds caused by Covid-19. One example of this is a recently launched distribution partnership between pan-African e-commerce firm Jumia and the B2B agtech company Twiga Foods, with the goal of ensuring families in the country are able to receive essential goods easily and at an affordable price.

Beyond this, there have been a number of other innovative partnerships launched over the past decade, including off-grid solar company Fenix International’s 2013 partnership with MTN (the pan-African telecommunications company) and petrol retailer Vivo Energy’s 2019 partnership with Jumia.

Of course, these partnerships don’t come without their own unique challenges. Reaching alignment on outcomes that are mutually beneficial for multiple parties requires strong co-ordination and well planned out partnership strategies and incentive structures. But if implemented well, they can be game changers for organisations lacking the existing capacity to deliver the last mile.

At ThirdWay Africa, we believe that partnerships can offer an effective and cost-efficient route to delivering the last mile at scale. And especially in these turbulent times, where health and food security concerns are mounting, such partnerships can be critical for ensuring adequate capacity for delivering lifesaving products and services.

On our end, we are already working with some of our existing clients and other ecosystem players to form potential partnerships for the distribution of the Covid-19 vaccine when it becomes available.

And at a broader level, we are hoping to encourage all of Africa’s stakeholders to think unconventionally about potential opportunities to leverage partnerships to deliver critical goods and services and to embrace ideas like coopetition or ‘unlikely collaborations’.

Put differently, we believe in the value of viewing partnerships through a new lens, where firms that have historically been deemed unviable as partners – tobacco companies, drinks producers etc. – are seen as lucrative partners in the expansion and improvement of last-mile capabilities among multilateral organisations, NGOs and governments.