Which African country has the potential to become the next commercial logistics hub?

During the pandemic, many sectors were hit by the virus and one such sector includes the supply chains and logistics activities. However, with the pandemic slowing down, the supply chains and logistics sector is back in Africa. In Africa, particularly West Africa, the logistics markets have been attractive for both domestic and international logistics providers. The factors contributing to this attraction can be attributed to air and ocean carriers, freight forwarders, investors and distributors over the past few years.

There has been a particular improvement in the logistics sector for Ghana has seen an improvement in the ranking of the 2022 Agility Emerging Markets Logistics Index. Ghana has successfully managed to climb eight ranks. Other top countries of Africa which are performing extremely well in the logistics index are Morocco, Egypt, South Africa and Kenya.

The emerging African countries in the logistics sector

In terms of digital readiness, Ghana scored the highest indicating that the country has managed to attract both logistics providers and investors. This was because of the integrated technology that Ghana has invested in because of the cross-border movement of goods. For Transport Intelligence, the adoption of technology has been identified as a driving factor for both the growth of the economy and business and it is extremely vital for the emerging markets in the logistics sector. Many logistics companies like ePacket and China Post are using technology to improve the user experience of the customers and it is visible from the improved customer experience, that technology is indeed important for the logistics sector. The three main focuses of the logistics sector in 2022 are operational technology, advanced technology like Artificial Intelligence and Supply Chain Sustainability. However, ahead of Ghana, also Kenya and South Africa. It needs to be noted that the West African country of Africa became the only country that improved in business fundamental ranking in 2022.

What are the emerging trends in the logistics sector of America?

The logistics sectors, irrespective of their geographical location have faced the problems of the segmented nature of the logistics and supply chains. However, slashing border tariffs for the African countries have proven to be very helpful for the African countries. An emerging trend in the African countries is that the logistics countries are also focusing on connecting the rural communities to the regional supply change in addition to, of course, providing the needs of megacities. It is also important to do so because still a large number of the African population can be predominately labeled as rural. Currently, the supply chain setup is very disconnected in the rural regions because of the lack of adequate road transport there.

The second emerging trend in African logistics includes the integration of technology in the logistics platform by including digital platforms for providing cost-effective solutions and increasing the efficiency of the delivery. The digital platforms of many logistics platforms are improving for coordinating freight delivery in the country.

The third emerging trend includes the increased internet penetration that is improving and increasing market connectivity. The market connectivity is improving greatly because more and more customers are coming online and as a result of that, businesses are using cloud services a lot. It seems like logistics companies will be including cloud services a lot and will improve in the operational process and it will further optimize the supply chain.

Another trend that is making its way in the African continent includes B2B or business-to-business focused start-ups which will help in the growth of the logistics sectors in Africa. The involvement of the B2B focused startups will surely improve the logistics sectors greatly. However, it needs to be noted that currently, the demand for consumer goods is still low in the African market because of the low purchasing power of the people. However, the business requirement of the logistics sector is still high but of course, there is always a scope of improvement by including demand for consumer goods.

Currently, the logistics sector of Africa needs to improve the physical infrastructure and work in a tech-enabled logistics subsystem which can be helpful in optimizing the infrastructure of the logistics sector and improving the supply chains. Many African countries are showing signs of improvement in the logistics sector and 2022 looks very promising for the logistics sector.