Africa’s logistics requirements
Africa is developing rapidly in many a field – but in several countries the transport and logistics industry still lags behind. A report released by the Africa CEO Forum has named the main challenges facing the continent for its logistics to be able to compete. A lot of money has already flowed into port projects; the roads and the railways, in contrast, frequently remain neglected.
Captains of trade and industry, pundits, policymakers and politicians are set to converge on Abidjan (Ivory Coast) on 9 – 10 March, for the Africa CEO Forum. The event’s organisers teamed up with the French consultancy Okan to prepare a paper on African logistics for the meeting.
In the report Frédéric Maury, the editorial director of the Africa CEO Forum, states that “logistics is one of the most important fields of development for Africa. Modernising the continent’s logistics infrastructure is a key to its economic transformation.” The report concludes that inadequate logistics infrastructure is one of the core reasons why a mere 18% of the continents national exports are destined for other African nations.
Positioning ports as hubs
The study isn’t restricted to describing the status quo; it simultaneously formulates six recommendations for private and state-owned players that would help to improve logistics in Africa. The measures include comprehensive port modernisation, whilst simultaneously ascertaining that a lot has already been done in this context.
Tanger Med is cited as one positive example; it may be possible to transfer its role as a regional hub to other regions too. International planning is essential to this end, however. West Africa is a prime example of an area where many port projects have slowed down and where there is a lack of a focus on a single hub.
The right environment
The report calls on governments to act too. Infrastructure projects often lack an economic base, scaring away investors. Private-public partnerships (PPP) might offer a more promising approach. There is plenty of capital available for infrastructure undertakings; it needs to find sound projects.
90% of the continent’s trade passes through its maritime ports; self-evidently, they aren’t an end in and unto themselves. They’re nothing without good links to and from their hinterlands.
Unfortunately, these are often inadequate, however. It costs EUR 2,500 to transport one teu over the 19,200 km from Shanghai to Abidjan, for example. To on-forward it then from there over a distance of 1,200 km to Ouaga- dougou, the capital of Burkina Faso, then costs another EUR 5,000.
Funds for road networks
The example above shows that there are still extensive gaps in the road and railway networks that need to be closed. Though 80% of the Trans-African Highway network has been completed, only half of it is tarmaced. The report states that investments of another USD 15–20 billion are needed – annually! – to bring road infrastructure up to scratch.
Some of the positive elements include the Durban–Lubumbashi road corridor, covering 8,600 km from the South African Indian Ocean port to the Democratic Republic of the Congo’s southeastern raw materials metropolis. The tarring of the road linking the Ethiopian and Kenyan capitals of Addis Ababa and Nairobi, to cite another example, shortened transit times between the cities from two weeks to two days and halved transport costs.
But logistics is only half about infrastructure; it’s half about people too. The report recommends an increasing focus on Africa’s growing middle classes, living largely in the big cities – which themselves are also growing. The urban agglomerations of Cairo, Kinshasa and Lagos all number more than 15 million inhabitants today. In 20 years the continent is expected to have 150 cities with more than 1 million people each (up from 54 today). Urban logistics thus become even more important in Africa than in other regions.
The report provides plenty of valuable inputs for participants attending the Africa CEO Forum. The answers to the challenges outlines will take a while to be implemented, however.
