Navigating cost, efficiency hurdles in Africa’s logistics in the AfCFTA era

By DON OKOTH

It is estimated that by 2050, Africa will be home to about two billion people. To effectively sustain this population and its needs the focus must be on sustainable infrastructural development across all sectors.

The fragmented, costly and unreliable nature of our logistics has now created the need for efficiency in the sector. These challenges are revealing where the opportunity lies, and innovative logistics companies and enablers in Africa are developing digital solutions to deliver efficient and cost-effective logistics and fulfilment services.

These companies are not in any way changing how logistics work; rather their solutions are addressing the various challenges of businesses and consolidating them on different tech enabled platforms. The effect of this is streamlined logistical operations and optimised supply chains.

This is rapidly opening up the continent, creating job opportunities and enabling businesses to grow. The African Continental Free Trade Agreement (AfCFTA) further seeks to support this drive through creating the largest free trade area in the world.

The transformative potential of this will heavily depend on the free flow of goods within countries and across borders. This can only be fully unlocked with a proper logistics infrastructure. Businesses no longer have to outsource multiple suppliers to help them service bits of their entire logistics value chain.

Today they can access a range of logistics and fulfilment services at the tap of a button. This enables them to properly manage their deliveries, get storage, insure their goods, access working capital, organise their inventory, track their shipments amongst many other benefits.

The effect of this is now translating to a thriving economy as businesses are now able to move their goods cost effectively. Data from statista indicate that logistics added approximately $11.7 billion to Kenya's gross domestic product in 2021, for example.

This was a 20 percent increase compared to the previous year 2020. With technology, there is an opportunity for us to grow this number to over 70 percent.