Africa is one of the top logistics investment opportunities anywhere in the world
, according to a new report from the London-based research and consultancy firm Transport Intelligence (Ti).
“Its untapped natural resources are vast, and foreign direct investment has poured in as Africans’ purchasing power grows,” Ti said. “Many countries in the region, such as Nigeria, are characterized by an increasingly rich middle-class. This has boosted sales of consumer goods, most of which are imported from China, Europe and North America. Global manufacturers are increasingly taking the market seriously and enhancing or building their marketing and distribution channels.”
The report cites the large and growing pharmaceutical, chemical and automotive manufacturing sectors in South Africa (the most developed economy in the region), providing opportunities for inbound logistics services providers. A robust perishables market in east Africa, particularly Kenya, already has a developed market presence in Europe.
Meanwhile, countries throughout the region are attempting to ramp up their high-tech sectors, to be the “Silicon Valley of the savannah.” And the drive to unlock Africa’s vast stores of natural resources shows no sign of slowing, the report said.
Ti Business Development Director Mike Nordmann, a veteran of the African logistics market, said investors and logistics companies will have to adopt a more positive approach if they wish to exploit the region’s opportunities.
“Many international logistics providers have either ignored Africa or served it at arm’s length through partners or agents,” he said. “However, this approach is increasingly difficult to sustain, as global clients need logistics providers willing and able to develop supply chains across the continent.”
The report highlights the challenges to doing business in the region, which are still plentiful. Most countries have yet to replicate South Africa’s mature and developed corporate environment.
“Weak transport infrastructure, lack of quality service providers, a disparate population, security issues and corruption combine to make doing business highly problematic,” Ti said. - Eric Johnson