Baobab Definitions: Going the Last Mile in sub-Saharan Africa

Last Mile noun / lɑːst mʌɪl / describes the last geographical segment of delivery, whereby products and services are delivered to customers.

The last mile problem in distribution is a term used to describe issues encountered in the delivery of goods and services directly to the customer. For example, a shop front is physical delivery channel that provides goods in the form of products to customers. Companies such as Amazon and eBay spotted an opportunity to disrupt the traditional model by developing convenient online market places, supported by clever logistics networks. This model, while incredibly convenient for the customer (who can now shop just about anywhere), costs the retailer on average 28% more to deliver door to door. For online retailers, solving the last mile problem means find a way to reduce delivery costs while maintaining customer convenience.

The Challenge in sub-Saharan Africa

For many entrepreneurs one of the big challenges they face when building a new business is how to reach their customers in the most effective way. In some parts of Sub-Saharan Africa ensuring efficient delivery in urban areas can be impacted by heavy congestion, especially in large cities such as Accra and Nairobi. This contrasts with rural areas where the varying quality of roads, and the large distances between built up areas and distribution centres can often isolate customers from retail networks.

Governments and policy makers across Africa have embarked on a series high-profile infrastructure projects to help open up the continent, however until these are completed nascent companies have sought out more innovative methods of tackling the last mile problem. Much of sub-Saharan Africa has well established mobile networks and SMS technology provides a cheap means of distributing information and connecting customers to retail agents. Some entrepreneurs have found that collaboration with existing networks such as local communities, motorcycle taxes or established retail outlets can also help to distribute products and information in a cheap and effective way.

Banking the Unbanked

In Zambia many young people are moving to the cities such as Lusaka to find new opportunities and work outside of the rural and farming communities. It is common practice for those earning a better salary in the cities to send money home to relatives to help continue to support their family financially. Without a safe and secure means of doing this the only method available is to send cash via the local public and private transport networks, and all too often this money goes missing along the way.

Mangwee are a Zambian fin-tech company who have developed a safe and secure mobile wallet to facilitate the transfer of funds from any mobile money network. Using a network of agents as a dedicated distribution network they have set-up roadside booths to enable customers to withdraw and load up money into their wallet in a safe and secure way. This is especially important where traditional banking does not have a sufficient presence or where the cost of banking means it is unobtainable.

Mangwee aim to grow their agent network to help create jobs opportunities in rural communities, and increase financial literacy. For their customers who were previously excluded from the formal financial sector, the mobile infrastructure has enabled a low cost means of saving and transferring money helping communities to grow and flourish.

Animal Vaccinations

Vaccinations are an affordable way of keeping a population healthy and form an integral part of animal husbandry. The positive effects of animal vaccination programmes are not only felt in economic terms, it has a positive impact on human capital too, reducing the need for children in rural areas to take time out of school to look after sick livestock. However in some communities, vaccination levels are low and the impact can have detrimental effects to livestock and even human health.

Cowtribe are a Ghanaian start-up aiming to solve the last mile problem for vaccination delivery. Vaccine distribution channels in sub-Saharan Africa can be expensive, and rely on movement of vaccines to distribution centres and then the re-distribution to rural communities. Cowtribe use a series of agents to manage demand and the delivery of vaccines to farmers who enter stock requests through an online and mobile portal. During the registration process the Cowtribe team document the specific breeds of livestock so they are also able to provide animal husbandry guidance directly to the farmer via recorded messages which are sent in the farmers local language.

Last mile delivery in sub-Saharan Africa is far more than providing convenient services for consumers. It closes the gap between national distribution channels and point of sale. The impact of these innovative networks is more far-reaching than efficient delivery, it opens up additional and vital channels for information and guidance to flow to help producers and entrepreneurs to grow and scale productive and more sustainable businesses.