E-commerce and regional trade key to growing Africa’s logisticsFriday March 31 2023
The logistics and fulfilment sector in Africa is a critical aspect of the continent's economic development.
The sector plays a crucial role in facilitating the movement of goods across the continent and beyond.
It is a sector that offers immense opportunities for growth and development, not only for African businesses but also for international companies looking to expand their operations in the region.
In recent years, the sector has experienced rapid growth, driven by the increasing demand for efficient and reliable delivery services. However, despite this growth, the sector still faces numerous challenges.
According to a report by the World Bank, the logistics performance of African countries remains significantly below that of other regions.
The report showed that Africa's logistics performance index (LPI) score in 2018 was 2.80, compared to a global average of 3.25.
This indicates that there is a significant opportunity for improvement in the sector. However, despite these challenges, there are several opportunities for growth.
One of the most significant opportunities in the sector is the rapid growth of e-commerce in Africa. According to a report by McKinsey, the e-commerce market in Africa is expected to grow to over $75 billion by 2025.
This growth presents a significant opportunity for logistics and fulfilment companies to facilitate the movement of goods between buyers and sellers.
It is also driving the development of last-mile delivery solutions in Africa. The development of last-mile delivery solutions is critical for the success of e-commerce companies, as it helps to ensure the timely and efficient delivery of goods to customers.
This presents an opportunity for logistics and fulfilment companies to develop innovative last-mile delivery solutions to support the growth of e-commerce in Africa.
Another significant opportunity for growth in African logistics is the development of regional trade.
The African Continental Free Trade Area (AfCFTA) agreement, which came into effect on January 1, 2021, aims to create a single market for goods and services in Africa, to boost intra-African trade.
The AfCFTA agreement presents a significant opportunity for logistics and fulfilment companies to facilitate the movement of goods between African countries, thereby promoting regional trade and economic development.
There is also significant potential for growth in the African logistics and fulfilment sector through the development of infrastructure.