As the global health funding landscape shifts, many low- and middle-income countries (LMICs) face an uncomfortable truth: their health systems are too dependent on external support to operate and function.
Public health supply chains (PHSCs) in Africa exemplify this dependence as the warehousing operations, transportation and last-mile distribution have historically relied on donor funding. This status quo has resulted in governments, local organizations and local private sector partners being left out of PHSC operations. And now with sharp reductions in foreign aid, many African countries find themselves not just losing donor funding, but also losing donor-operated supply chain infrastructure.
This situation is an important wake-up call for the continent. Now is the time for African governments to rethink and redesign PHSC financing and governance, while leveraging all available local resources – especially from the growing local private sector.
Leveraging the Private Sector: The Untapped Engine
Successfully managing PHSCs requires developing and expanding government-run logistics units. This means hiring and retaining specialist staff, investing in IT systems for supply chain visibility and making large capital investments in vehicles, warehouses and cold chain infrastructure. This in-house approach not only requires significant resource mobilization; it also requires significant time to create new positions in ministries of health (MoH) and to attract and maintain specialized talent.
Moreover, sustaining such systems without consistent donor support has proven challenging in many LMICs. And while donor support has achieved important results in LMICs, this success has often relied on building parallel systems (or systems that rely on global, donor-funded, implementing organizations to carry out operations). In many African countries, these parallel systems only increase fragmented distribution, with separate systems managing medicines, vaccines and other commodities leading to overlapping and inconsistent deliveries to health facilities
In contrast, government collaboration with the local private sector offers significant potential for sustainable development in Africa. Private sector companies have expertise in areas such as data analytics, transportation and warehousing operations and cold chain maintenance. They hire and train people with these specialized skills, and they invest in the infrastructure to maintain vehicles, IT systems and tools. Additionally, when governments leverage the local private sector to provide these types of products and services for public systems they are also contributing to the growth of their economies.
Outsourced Logistics in Africa
One critical way African governments can engage local private sector resources is through outsourced logistics. When African governments strategically plan and manage outsourced logistics for PHSCs, the benefits are substantial and far-reaching¹²³. Evidence from 2024 VillageReach benchmarking shows that when implemented effectively, outsourcing improves performance, efficiency and sustainability. Several African countries are already demonstrating the value of outsourced logistics:
- Mozambique: The national supply agency CMAM (Central de Medicamentos e Artigos Médicos), with support from VillageReach, began piloting outsourced distribution in 2015. This improved product availability and delivery reliability in remote areas. The country has since progressed from third-party logistics (3PL) pilots to a national fourth-party logistics (4PL) coordination model.
- Ethiopia: The Ethiopian Pharmaceuticals Supply Service (EPSS), is exploring 3PL contracts to manage regional distribution hubs, allowing the government to focus on oversight and system strengthening.
- Zambia: The Zambia Medicines and Medical Supplies Agency (ZAMMSA) outsources approximately 70% of its distribution, creating a more responsive and cost-effective system.
- Democratic Republic of Congo (DRC): Member distributors of the FEDECAME (Federation of Essential Medicines Supply Centers) use a mix of their own vehicles and outsourcing to deliver medicines and supplies to hospitals and health facilities. The MoH also conducted several years of drone delivery to remote health facilities working with private sector drone operators.
Given the evidence that outsourcing can ensure the reliable deliveries African governments need to consider outsourcing supply chain logistics to the local private sector.
The Way Forward
Building public-private sector collaboration requires actions from donors and governments to create sustainable financing solutions for PHSCs. Donor support should function as temporary assistance to strengthen private sector engagement and stimulate market competition rather than become a permanent solution to cover daily operational expenses. Some ways donor-funding can support this is through:
- De-risking public-private collaboration and encouraging competition through catalytic funding;
- Building government contracting and oversight capacity;
- Ensuring supply chain systems and workforce training support management of integrated logistics systems that cut across multiple health areas;
- Establishing digital platforms focused on priority country needs, and are designed with sustainable capacity-building measures to ensure long-term local management.
To shift from dependency to sustainability, governments can take five bold yet practical steps, even before new funding becomes available.
- Prioritize supply chain financing by integrating it into national health budgets as a core system investment not just as a response mechanism during emergencies.
- Establish foundational systems to enable future outsourcing. This includes developing clear policy and operational frameworks, mapping and assessing potential private sector partners and setting up contract management and performance monitoring tools within government teams.
- Implement key enablers that attract local logistics providers, including clear service standards and contract expectations using available tools such as the Global Fund Outsourcing Guidance;
- Invest in developing government management capacity in areas critical to manage outsourcing relationships, including contract management and data analytics. If no funds are available, prioritize low-cost training, mentorship or partnerships.
- Adopt digital tools for logistics performance management. Governments can begin with simple dashboards or open-source platforms to monitor delivery performance, costs and stock availability—and scale up as resources allow.
Moving away from dependent systems and moving toward more collaboratively built, and government stewarded, systems is necessary for sustainable PHSCs. African governments can achieve this through building resilient, locally managed systems that make strategic use of private sector expertise. In this context, donor funding can be more impactful when positioned as catalytic capital, complementing domestic investments, rather than replacing them.
The opportunity for action is now. The communities we serve deserve nothing less.
¹ Tetteh EK. Outsourcing Supply Logistics for Health Commodities in Africa. J Health Care Poor Underserved. 2024;35(3):995-1010. PMID: 39129615.
² Agrawal P, Barton I, Bianco RD, Hovig D, Sarley D, Yadav P. Moving Medicine, Moving Minds: Helping Developing Countries Overcome Barriers to Outsourcing Health Commodity Distribution to Boost Supply Chain Performance and Strengthen Health Systems. Glob Health Sci Pract. 2016 Sep 29;4(3):359-65. doi: 10.9745/GHSP-D-16-00130. PMID: 27688714; PMCID: PMC5042692.
³ Solomon, Habtamu & Tamrie, Manaye & Abebe, Abinet & Haile, Kaleab & Tufa, Biniam & Ambaye, Abyou. (2023). Outsourcing a Means for Strengthening the Health Care Supply Chain Management: A Narrative Review. 10.35248/2329-6488.22.10.3