How can Africa cut the red tape and improve trade?
Kenya spends $115 per container in import compliance costs. That may seem a lot, but ...
Falls in oil and commodity prices have led to lower economic activity in Africa – but there are a host of projects and investments under way to boost its infrastructure and create opportunities for logistics providers.
And regionally, exports are changing, as revealed today in The Loadstar’s LongRead: Africa.
As West Africa looks to reduce its reliance on oil, eyeing agriculture instead, there is also a move to boost manufacturing as labour costs grow in China and South-east Asia.
FMCG and apparel are on the rise, and more than 70% of the world’s biggest consumer goods companies are already operating in Africa.
But the continent is still held back by poor infrastructure and high tariffs, as well as cumbersome processes. It takes, for example, between 79 and 100 government officials’ signatures to clear an individual shipment for import into Nigeria.
Nevertheless, there is optimism – and investment – by companies operating on the continent as well as governments.
Rail, port and airport projects could see new gateways opening, with Ghana increasingly boosting its position as the entrance to West Africa. And in East Africa, a rail project between Mombasa and Nairobi should shave 60% off freight costs. Developments in Djibouti, Mozambique, and Tanzania, to name a few, are also giving shippers and forwarders more opportunities.
“To date, Africa’s significant growth has taken place in spite of its limited infrastructure development,” said Sylvain Kluba, Agility’s chief operating officer for the Middle East and Africa.
“The removal of obstacles to intra-Africa trade and improvements to infrastructure and connectivity are important steps towards increased trade within Africa, which will create opportunities for transport and logistics service providers on the African continent.”