Africa has US$45 bn logistics 'spending gap'

Road haulage will continue to move increasing tonnages in Africa as the continent tries to play logistics infrastructure “catch up” with the rest of the developing world. Across the continent African countries are falling behind in competitiveness due to a lack of investment in logistics infrastructure, according to De Buys Scott, head of the KPMG Global Infrastructure advisory in Africa. “Africa has a history of underdevelopment of infrastructure – across roads, railways, airports, ports and harbours,” he says. Around US$45 billion is currently being invested in infrastructure. However, US$90-100 billion a year is needed to catch up with other major developing countries. Even then, it has been estimated that there is a US$45-bn “spending gap”. The challenge facing miners in Africa is often that there is too much bulk stock in one region or country that does not have a direct line from pit-to-port – and to create this access would require significant investment into the infrastructure. “On the other hand, we are also faced with regions or countries where the volumes of resources that are being extracted from the mines aren’t large enough to justify a business case for investment in large transport infrastructure development.” Rail holds the key, but the emphasis is likely to be on the movement of bulk rather than containers. “The major constraint to the export of resources – specifically coal, manganese and iron ore – from the mining sector is around rail infrastructure and this is severely hampering the sector and the economy in general, as currently these bulk resources are often being transported by road, which is uneconomic and disproportionately damaging to the road infrastructure. African ports also need to modernise. “There is also a global trend for ports to become more involved in value added activities such as cargo processing and logistics, which will require new processes, practices and technological advances around stock control and integration, as well as connectivity,” says Michael Fletcher, regional sales director for Ruckus Wireless sub-Saharan Africa.