Despite
an average annual growth in exports of 8.5% since 2010, trade between African
regions remains low when compared to other parts of the world, according to The
Africa Economic Outlook Report 2016. Intra-regional trade accounted for 16% of
Africa’s total trade in 2014 - mainly stimulated by manufactured goods,
accounting for 60% of total regional trade.
The
report findings note that the potential of intra-African trade has not yet
reached fruition. There are multiple opportunities to increase intra-regional
trade, especially in line with the Tripartite Free Trade Agreement. If used
properly, this agreement has the potential to significantly boost economic
growth in the region.
The
report also forecasts that the Gross Domestic Product (GDP) of major
Sub-Saharan African cities, including Johannesburg, Cape Town, Lagos and
Luanda, are expected to increase, citing the quality of infrastructure and
logistics as the key contributing factors. These findings demonstrate the
important role that effective logistics play in boosting a country’s economic
growth by enabling trade.
Heymans
also points out that if intra-regional trade in Africa is to be boosted, it is
crucial to put in place effective logistics infrastructure to facilitate the
movement of goods across borders, and ultimately reduce the cost and time of
trade.
For
countries looking to boost inter-regional trade, it is vital to consider the
time and costs associated with transporting goods. It is important to take a
holistic approach when it comes to managing supply chain risk, in order to achieve
greater visibility, flexibility, and control. Businesses in Africa are under
increasing pressure in the current economic climate to remain competitive, both
locally and globally, and sometimes lack the ability to build resilient supply
chains.
Making
strategic decisions to outsource logistics can make a significant contribution to
a business’s profitability. Always ensure that you have the right partners who
understand the global economy and, more importantly, the intricacies of doing
business in each individual African county. It’s not a one size fits all
approach.
Home to one of the fastest growing middle classes in the world, Africa is a captive market, filled with consumers who are looking for variety and easy access to goods. The market is there, it’s about getting the right goods to the right people, at the right time.
Contributed by: Hennie
Heymans, CEO of DHL Express Sub-Saharan Africa
