Tradeshift Supports Compliance in Africa with Enhanced Capabilities
Tradeshift has added enhanced compliance support to eleven more African states in the latest release and intends to support all African states by the end of 2023. Marcus Gray, Product Manager, Tax Compliance and Interoperability at Tradeshift, explains how a simplified compliance process built on digital foundations can support Africa’s emergence as a future powerhouse in globally diversified supply chains.
Africa’s trade levels have plateaued in recent years. The continent has 17% of the global population, but its proportion of global trade is down from the height of 5% in the 70’s to 2.3%. Yet, there’s an air of optimism as Africa’s population surges and annual combined output is projected to reach a staggering $16 trillion, as highlighted by Professor David Luke of the London School of Economics.
A generational opportunity for compliance in Africa
As global sourcing diversifies and industries such as clean technologies take shape, Africa has the potential to emerge as a major participant in global supply chains. In an age of labor shortages and demographic challenges across the majority of the world’s richest countries, Africa’s young population also offers a huge source of relatively untapped economic growth potential for the continent.
The introduction of the African Continental Free Trade Area (AfCFTA) in 2019 represents a pivotal moment for Africa. The removal of trade tariffs is expected to drive a remarkable 52.3% boost in intra-continental trade. The AfCFTA isn’t just a piece of paper; it could serve as a catalyst for growth, particularly in vital manufacturing sectors that contribute significantly to intercontinental trade. Notably, Africa holds a dominant share of the world’s metal reserves required for industries like electric cars.
Making trade with Africa seamless
To realize Africa’s full potential as a future powerhouse of global supply chains, investment is paramount. The World Bank’s recommendations emphasize the need for bold domestic structural reforms, focusing on improving digital connectivity and overhauling fundamental legal and institutional frameworks.
Africa comprises a hugely diverse range of countries, each with its own set of regulations and compliance requirements. For large multi-national organizations considering a supplier diversification strategy that includes a more significant footprint in Africa, navigating entry into new jurisdictions can be a complex and time-consuming process.
Beyond the inefficiencies stemming from a persistent reliance on manual and paper-based processes, non-compliance poses tangible risks for businesses, including penalties, delays, strained supplier relationships, and reputational harm for companies found in breach.
Digitalization has a pivotal role to play in enhancing the connective tissue between African businesses and global supply chains, breaking down barriers, simplifying trade processes, and enhancing transparency.
Tradeshift brings digital compliance capabilities to Africa
Tradeshift, in its mission to build a more connected future for businesses, offers a platform that simplifies compliance and trade processes. Businesses can securely confirm trading relationships and exchange purchase orders and invoices. Governments, global corporations, and companies of all sizes rely on Tradeshift to conduct business in full compliance with local and international tax regulations.
As part of our commitment to delivering global compliance as a service, our latest release includes enhanced compliance support to 11 more African states. We are also committed to supporting all African states by the end of 2023.
Harnessing the network effect
Compliance may seem like a small piece of the puzzle, but it is key to creating a trusted environment where businesses can trade seamlessly and with confidence. In the context of a global business network like Tradeshift, it’s also a gateway to unlocking a range of additional benefits extending far beyond pure risk mitigation.
Having the right digital infrastructure in place will help to connect African companies to the global market, opening up new opportunities for trade through participation in digital marketplaces. Rich data underpinning transaction flows will also enable African businesses to gain better access to the kind of working capital provisions and embedded financial services they will need to invest in growth.
The future of African trade looks promising, and we are excited to be playing our own small part in helping businesses across the Continent fully grasp the opportunities ahead.
Learn more about Tradeshift’s global e-invoicing compliance capabilties.
