Africa approaching critical economic mass

Freight volumes in Africa will continue to rise as the continent’s economy starts realising its potential. Africa is home to some of the fastest growing economies in the world, according to Charlotte Arigye-Kaija of PwC’s Africa Desk. “To give an example, the annual percentage GDP growth rate (for 2009 as obtained from the World Bank) for Ethiopia is 8.7%, the Republic of Congo and Malawi at 7.6%; Uganda at 7.1% and Zambia at 6.4%.” These positive figures make Africa “a very desirable market” for local and international brands that will be vying for the African consumer who will become more demanding and sophisticated because they will have buying power and so much more to choose from. That choice will come from a combination of imported and locally manufactured goods – all of which will have to be transported by road, rail or air. Costs will be a factor determining the success of both the brand and its logistics infrastructure. Even though there is sustained economic growth on the continent, poverty is still a factor. Some 61% of Africans live on less than US$ 2 (R13.35) a day. South African companies may not be in the best position to benefit from this growth. Faced by these pressures, shippers, manufacturers, and importers and exporters may decide that South Africa is not the most cost-effective gateway to Africa. The recent Seventh Annual State of Logistics survey warns that the country’s logistics costs are growing faster than that of other countries in Africa. Morocco, Tunisia, Kenya, Mauritius and Namibia are already being used by international logistics companies as alternative hubs because they are more costefficient.