Idea For Africa: Weak Links in the Supply Chain As the Root of All Poverty

 

Based on having studied the Walrasian equilibrium concept a little bit, I feel comfortable that I can adequately describe the "big picture" of how any economic system works.  There are companies.  The companies purchase inputs--or gather raw materials directly--from other companies, along with equipment and other overhead things like transportation services.  Based on equipment and ingredients, those companies produce a product, which they then sell either to retail stores, wholesalers, another manufacturing company that needs it for manufacturing, or, in some cases, directly to consumers.

The land of a country is loaded with these companies.  The companies form a network that serves the community of needs.  The key issue is, there is what is commonly called a "supply chain," and that name is an apt non-misnomer.  My key assertion is:  one weak or failed link in the supply chain for a product can ruin the economic indicators and health for the market for that product.

For example, if you were selling electricity, you'd be upset if raw materials such as coal in your home land were depleted to the point of exhaustion.  If you were selling stuffed teddy bears, and sewing needles became scarce or unavailable due to changing economic conditions that eliminated all of the firms that produced sewing needles (whether production of the teddy bears were automated or by hand), you would have trouble manufacturing teddy bears at a reasonable price.

In general, if we are interested in helping Africa, we need to build robust, full supply chains that have no weak or missing links, and, we need to keep constant tabs on how the businesses that are in business are going, so that we can tend to supply chain issues for every important product in the economy of any African country or region.