Logistics And Transportation, The Backbone Of Economy

Africa, the continent enriched with hopes and lucrative business opportunities, provides some low-hanging fruit in terms of investment opportunities.

Formerly known as a dark continent, it has now become the favorite business destination of entrepreneurs across the globe. This region of the world provides the untapped opportunities, which could be used as the stepping stones to reach milestones. With more and more number of corporates and investors, showing keen interest in Africa for expanding their roots, continent is becoming host of world’s top business models. With increasing business activities, many of the obstacles have also been identified. One such prime obstacle is transportation and logistics in Africa.

Quite an overlooked fact, but according to the United Nations Economic Commission for Africa, only about 30% of African roads are well constructed and paved, and 50% of them still remain in pathetic condition. According to the facts, shipping cost of cement from Shanghai (China) to the shores of Djibouti is approximately 60%cheaper than shipping it from Addis Ababa, Ethiopia’s capital city to Djibouti by road. These facts obviously doesn’t portray a positive image of logistics and ports. But the biggest question is, why is logistics in such a poignant condition in Africa? According to a local source, it requires nearly double the amount of days and more than 10 times the price to move a 40ft container from Kenya’s second largest city, Mombasa, to Rwanda’s capital Kigali, than it is to move the same container from Shanghai to Mombasa, according to a local shipper in Kigali. These figures are sufficient enough to present the actual and appalling reality of the logistics industry in Africa. The dire need of improvements is attracting investors from all over the world to invest in this industry.

Obstacles