Tackling freight costs through digitalisation and south-south trade

The distributive trade sector has undergone significant changes since the pandemic, with global trends showing a shift towards digitalization and e-commerce. According to the United Nations Conference on Trade and Development (UNCTAD), global trade in goods rebounded strongly after an initial decline, with trade volumes reaching pre-pandemic levels by early 2021. However, supply chain disruptions and increased shipping costs have posed challenges for businesses.

In Africa, the distributive trade sector has faced both opportunities and challenges. The pandemic highlighted the importance of resilient supply chains and the need for diversification. Many African countries have focused on enhancing their logistics infrastructure and promoting intra-regional trade to reduce dependency on imports. The African Continental Free Trade Area (AfCFTA) has played a crucial role in facilitating trade and boosting economic recovery.

In Mauritius, the distributive trade sector has shown mixed performance in 2023. Pick and Buy Limited emerged as the top performer with a turnover of Rs 11,866.18 million and a profit before tax (PBT) of Rs 196.2 million as of June 30, 2023. Seven Seven Co Ltd (Dream Price) followed with a turnover of Rs 7,587 million and a PBT of Rs 121 million as of June 30, 2023. Udis Ltée (Super U) also performed well with a turnover of Rs 7,578 million and a PBT of Rs 450 million as of June 30, 2023. Some companies faced financial challenges last year. Somags Ltée reported a loss before tax of Rs 9.4 million as of December 31, 2023, and King Savers Ltd reported a loss of Rs 27.9 million as of September 30, 2023. These results reflect the ongoing impact of supply chain disruptions and increased costs on the distributive trade sector.

The World Bank’s analysis in their report “The Distributional Impacts of Trade” highlights the need for policy responses to spread the gains from trade more widely and make trade work for everyone. This is particularly relevant for the distributive trade sector, which plays a crucial role in connecting producers with consumers and facilitating economic growth.

The distributive trade sector in Africa and Mauritius is adapting to the new normal, with a focus on digital transformation and resilience. Addressing supply chain challenges and promoting intra-regional trade will be crucial for long-term growth and sustainability. The insights from international institutions underscore the importance of strategic investments and policy reforms to support the sector’s recovery and future development.