Transport & Logistics

Africa being home to several of the world’s fastest growing economies, transport_and_logisticscompanies from around the world are looking to enter the region in order to escape aggressive competition in their home markets and improve sales. Infrastructure forms the basis for the thriving of this sector, therefore gaining an understanding of the state of infrastructure in the different geographies where new entrants want to play is critical, partly to mitigate potential business risks.

Transport and logistics sector provides access to consumer markets, connects raw materials to markets, promotes regional integration and ultimately, improves connectivity to the global economy. Further, the sector has a direct impact on a country’s handling capacity for imports and exports, distribution route development, the frequency of shipments and the cost for freight handling, storage, distribution and related services. All these factors affect how competitive a country becomes in the world market.

Despite the huge potential in Africa, the continent is still plagued by poor and under-developed transportation infrastructure, limiting accessibility to consumers, hampering intra-regional trade and driving up import and export costs. It is however important to note that parts of Africa, especially Southern Africa have relatively well developed infrastructure comparative to other parts of Africa.

There is need for African governments across all regions to prioritise the rehabilitation, upgrading and expansion of transportation infrastructure in order to rapidly improve trade, both international and intra-regional as well as make travel easier and safer.

Africa’s mushrooming middle class and its vast growth potential holds the Africa promise – creating expectations of a large, untapped, yet accessible consumer population which is eager for new products and services.

Infrastructure such as road and rail networks that span regions, and indeed, the continent is elusive. Apart from South Africa with a relatively developed transport and logistics infrastructures, other countries in the continent are still struggling. While road is the most common means of transportation, it is not very well developed. According to a World Bank report, only 27.6% of Africa’s 2 million kilometres of roads are paved with 19% being in sub-Saharan Africa. It will require considerable investment to fix the thousands of kilometres of roads that need attention. On the other hand, Air transport remains one huge untapped opportunity in the African continent and calls for more investments in this sector.

There is a fast growing demand for the vast raw commodities available on the African continent which has grown year on year over the last few years. Africa has an abundance of oil, gas, and mineral resources and significant opportunities for agricultural expansion.  Currently, there are numerous large-scale transport infrastructure projects currently underway across the continent, which should help to improve transport connectivity within Africa. Current major projects include the East African standard gauge railway which aims to connect Kenya, Uganda, Rwanda and South Sudan, and the West Africa rail loop connecting Côte d’Ivoire, Burkina Faso, Niger, Benin, Togo and Nigeria. However, infrastructure improvements will struggle to keep pace with the astonishing speed at which Africa’s cities and economies are growing.

Innovative solutions need to be developed to overcome Africa’s challenging transport infrastructure, for example cargo drones, re-designing of the air transport among others, use of mobile technology to reduce the costs and ease of transportation in the continent.

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