Logistics investments could aid African growth

African countries would be creating more jobs and reducing poverty if they put greater emphasis on logistics and transport-related development and investment, according to the 2015 Regional Economic Outlook for sub-Saharan Africa by the International Monetary Fund (IMF). While predicting that the African region will continue to have the second-fastest economic growth rate at 4.5% in 2015 (after Asia), the continent faces a number of “headwinds,” according to the report. “Notable exceptions” to the positive growth prediction are South Africa, where growth is “expected to remain lacklustre” due to continuing problems in the electricity sector, and Guinea, Liberia and Sierra Leone where the Ebola outbreak “continues to exact a heavy economic and social toll”. South Africa is, however, listed together with Ethiopia, Kenya, Seychelles and Tanzania as being among the leaders in the integration of the local economy into global value chains. Manufacturing, agriculture and agro-business, and to a lesser extent, transport, tourism and textiles, have benefited the most from deeper integration, says the report. Logistics-related “headwinds” companies can expect to encounter when looking for growth through expansion into Africa include the lack of sufficient transport-related infrastructure, as well as tariff and non-tariff barriers. Shippers – the customers – are looking for more business-friendly legislation in most African countries coupled with easier access to credit. Landlocked countries without natural resources are also struggling to increase trade integration due to poor transportation infrastructure and limited interest from emerging markets.