For UK and US-based African food importers, navigating the global supply chain is both a passion and a complex business challenge. Ensuring the integrity of packaged, shelf-stable, and frozen food products while managing recurring payments in NGN, XOF, and KES requires a proactive approach to fraud mitigation.
This guide outlines key strategies to protect your business from common risks, from product adulteration to financial scams.
1. Due diligence and supplier verification
The foundation of a secure supply chain is trust, which is built on rigorous due diligence. Simply relying on online information is not enough; you must verify your partners on the ground.
Whenever possible, cultivate long-term partnerships with suppliers who have a proven track record and avoid one-off transactions with unknown vendors. Using a trusted agent or a third-party inspection service in the source country to conduct in-person visits to the supplier's facilities can also help confirm their existence, operational capacity, and adherence to quality standards.
Insisting on comprehensive documentation (including invoices, packing lists, certificates of origin, and phytosanitary certificates) for every shipment. Verify these documents for authenticity and consistency.
2. Product authenticity and traceability
Food fraud, such as adulteration, counterfeiting, or mislabeling, is a significant risk. This can not only damage your brand's reputation but also pose health risks to your customers.
Implement authenticity testing
Incorporate random product testing into your process. This can include laboratory tests to verify the ingredients and composition of the food, ensuring it hasn't been substituted or diluted.
Evaluate your supply chain
A robust supply chain is a transparent one. Work with suppliers who can provide full traceability, allowing you to track the product from its point of origin to your warehouse. Technologies like blockchain are increasingly being used to create secure and transparent records of transactions and product journeys.
Understand local regulations
Be aware of the food safety and quality regulations in your source countries, such as those set by Nigeria's NAFDAC. A supplier's compliance with these standards is a strong indicator of their credibility.
3. Using a trusted and efficient payment platform
Fraudulent payment requests and scams are a constant threat in cross-border trade. When making payments in Nigerian Naira (NGN), West African CFA Franc (XOF), or Kenyan Shilling (KES), securing your funds is paramount.
Using established and regulated cross-border payment platforms is crucial. Companies like Verto are regulated by bodies like the UK Financial Conduct Authority (FCA) and specialize in secure, multi-currency transactions. These platforms offer transparent exchange rates, secure portals, and dedicated fraud prevention teams. They also offer seamless transactions and less hidden fees
It’s not just the platform, it’s also about having a clear payment protocol and good payment operations. Never change payment details via unverified email or phone calls. Always verify any requests to alter bank accounts or payment instructions through a pre-agreed, secure channel with your trusted supplier.
Foreign exchange rates can fluctuate quite often, especially when it comes to exotic currencies. Be aware of currency fluctuations that can impact your costs. Many cross-border payment platforms offer solutions to help you manage foreign exchange risks, protecting your profit margins.
4. A collective effort in the fight against fraud
The fight against fraud is a collective effort. Staying informed and leveraging technology can give you a crucial advantage.
Connect with other importers in the diaspora community. Sharing information about fraudulent schemes and suspicious suppliers can help protect everyone in the network. News and reports from food safety organizations, customs agencies, and business associations will keep you informed about new fraud trends and risks.
As digitalization in African economies progresses, new tools are constantly emerging to combat fraud. Working with suppliers who utilize digital technologies for documentation, supply chain management, and communication can provide an added layer of security and transparency.
Verto is regulated by a number of financial authorities, including the Financial Conduct Authority (FCA) in the UK and FINTRAC in Canada, ensuring compliance with strict financial laws and security standards. As an authorized Electronic Money Institution (EMI), Verto holds customer funds in designated safeguarding accounts. This means that customer money is kept separate from Verto's operational funds, and in the unlikely event of insolvency, these funds are protected.
Verto also follows strict Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. This involves verifying customer identities to prevent financial crime and ensure a secure environment for all users.
If you would like to explore how Verto can enhance your operations, sign up for a free business account today.
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