Developing resilient supply chains in the Southern African Development Community: Lessons from the impact of COVID-19

ABSTRACT

Background: The coronavirus disease 2019 (COVID-19) pandemic has had a significant impact on international trade and supply chains. Border closures and reduced demand for traded goods provoked demand and supply shocks in supply chains, including those of the Southern African Development Community (SADC). Continued vulnerability of regional supply chains affects the long-term socio-economic development trajectory of the SADC. Objectives: This article investigates whether supply chains and their various components have exacerbated the pandemic’s trade impact, with specific reference to the SADC. The objective is to inform regional development policy interventions to improve the resilience of the SADC supply chains in future disturbances. Method: An econometric analysis was conducted to determine the relationship between supply chain efficiency (and the various sub-indicators) and the impact of the pandemic on merchandise trade volumes. The latter constitutes the dependent variable of the analysis and is quantified by measuring the deviation from the pre-shock growth path in the base year (2020) of the pandemic. Data sets from the UNCTADstat database were used. The independent variables are the sub-indicators that form part of the Logistics Performance Index (LPI), the data of which are sourced from the World Bank (2022). In addition to the chi-square test of homogeneity and the Shapiro–Wilk test of normality, regression analyses were conducted to determine the significance of the independent variables, in addition to their association and correlation with the dependent variable. Results: The analysis indicates that supply chain efficiency and components related thereto, including customs clearance, infrastructure, international shipments, logistics competence, tracking and tracing and lead time, are of high significance to and correlate with the impact of the pandemic. Conclusion: Regional development policy in the SADC should prioritise the targeted improvement of specific physical and non-physical infrastructure to support the development of efficient and resilient supply chains. Interventions should focus on improving border and customs processes and tracking and tracing capabilities of logistics service providers. This will contribute to the achievement of regional development objectives and catalyse the competitiveness of the SADC in the face of increased supply chain regionalisation.