In recent years, Africa has emerged as a continent ripe with potential, boasting a wealth of resources, a young population, and growing markets.
Yet, one of the critical barriers to unlocking this potential is the inefficiency of logistics and supply chain systems.
As Africa aims to boost trade, attract investment, and improve the quality of life for its citizens, revolutionizing logistics stands at the forefront of this mission.
According to the African Development Bank, logistical costs in Africa account for approximately 13-15% of GDP, significantly higher than the global average of about 8%. This inefficiency can be attributed to outdated infrastructure, regulatory bottlenecks, and insufficient technology.
The World Bank’s 2022 Logistics Performance Index ranked African countries lower than many regions worldwide, underscoring the urgent need for reform.
For instance, South Africa ranked 33rd, while countries like Somalia and Sudan were at the bottom of the list, demonstrating the wide disparity in logistics capabilities across the continent.
In an exclusive interview with Kurunzi News Charles Thuo CEO and Founder of Apexloads, a company dedicated to improving supply chain efficiency in East Africa says that the business is about someone’s effort.
“The logistics landscape is a mixed bag. While some regions are progressing, many areas still lack basic infrastructure,” says Thuo.
”For example, only 20% of roads in Sub-Saharan Africa are paved, which severely limits access to markets.
”Investments in logistics are critical. For every 1% increase in logistics efficiency, we could see a 2-3% increase in GDP. This could transform economies, especially in landlocked countries that face significant barriers to trade.”
As Thuo points out, technology is a key enabler in overcoming these logistics challenges. Innovations such as mobile applications for tracking shipments, automated warehousing solutions, and AI-driven demand forecasting are becoming more prevalent.
In Kenya, for instance, mobile technology has transformed logistics operations, with over 90% of businesses adopting mobile solutions to streamline processes.
“Technology can be a game-changer. By digitizing supply chains, we can reduce lead times and enhance transparency. In Nigeria, logistics companies that have adopted digital platforms have seen operational costs drop by up to 30%.”
Thuo notes that revolutionizing logistics in Africa will require collaboration between governments and the private sector.
Public-private partnerships can leverage resources and expertise to improve infrastructure and regulatory frameworks. The African Union’s Agenda 2063 emphasizes the need for such partnerships to enhance trade across the continent.
“Governments must create a conducive environment by simplifying regulations, investing in infrastructure, and fostering public-private partnerships.
“In countries like Rwanda, the government has streamlined customs processes, leading to a significant reduction in clearance times.”
The relationship, he adds that, must create more confidence to those seeking loans in terms of repayments and interest rates and the security to transport goods to their destinations.
“Trust is key in logistics and it should be a two way traffic.The lender of loan need to be assured that a transporter will pay back. Again, in logistics you have to deliver on the specified time.
“It this trust and confidence that has enable Apexloads to sign trade agreements with giant entities such as East African Business Council which is mandated to eliminate trade barriers and create conducive business environment”.
Several African nations have embarked on logistics reforms that serve as models for the rest of the continent.
In Ethiopia, the government invested heavily in its railway system, connecting landlocked regions to ports, which has improved trade access.
Similarly, the launch of the African Continental Free Trade Area aims to facilitate intra-African trade by reducing tariffs and streamlining customs procedures.
In South Africa, the government has introduced initiatives to upgrade its ports, aiming to increase container capacity by 50% by 2025. This strategic move is anticipated to enhance trade efficiency and attract foreign investment.
Despite advancements in technology and infrastructure, the human factor remains critical in logistics. Skilled personnel are necessary to manage sophisticated supply chains effectively.
Currently, there is a shortage of logistics professionals in Africa, with an estimated 80,000 unfilled logistics roles across the continent.
Apexloads boss emphasizes on the importance of education and training: “We need to invest in education and vocational training programs focused on logistics.
“Collaborations between universities and logistics companies can help prepare a skilled workforce. In South Africa, we’ve seen successful initiatives where companies partner with institutions to develop curriculums tailored to industry needs.”
The potential economic impact of improving logistics in Africa is staggering. The McKinsey Global Institute estimates that closing Africa’s infrastructure gap could generate an additional $2.5 trillion in GDP by 2025. Furthermore, enhancing logistics could reduce food waste, improve healthcare delivery, and boost overall economic activity.
“I believe we are on the brink of a logistics revolution. With ongoing investments in infrastructure, technology, and skills development, we can expect to see dramatic improvements. The next decade will be pivotal in positioning Africa as a global logistics hub, attracting investment and driving economic growth,”he tells Kurunzi News.
Revolutionizing logistics in Africa is not just about moving goods; it is about creating an enabling environment for economic growth and development.
As countries invest in infrastructure, embrace technology, and foster collaboration between the public and private sectors, the continent can unlock its true potential.
The insights from industry business leaders like Thuo illuminate the path forward—one where improved logistics can transform lives and economies across Africa.
With commitment and innovation, the logistics revolution in Africa is not just a possibility; it is an impending reality.
