This archive report was first published on 16 September 2019.
Boosting Intra-African Trade with Technology and E-Logistics ¶
Published on September 16, 2019, in The Standard.
For many African economies, promoting trade is a top priority. However, turning this vision into a reality remains a challenge. Trade remains depressed below optimum levels, despite sustained investment in infrastructure and diplomatic efforts.
The rollout of infrastructure has been backed by sustained diplomatic efforts under the auspices of regional trade blocs to ease movement of goods and people, as well as free trade protocols. These efforts climaxed with the proposed African Continental Free Trade Area (ACFTA), which is currently being ratified by African countries.
However, the higher cost of goods made in Africa has still rendered them uncompetitive on the global marketplace. This has largely been driven by logistical costs, due to systemic inefficiencies. It is estimated that the cost of logistics accounts for up to 40-60 per cent of the final price of goods in African nations, whereas it only takes up 6 per cent of the prices in the US.
According to Ron Okello, the Head of Transport at Lori, an e-logistics firm founded in Kenya, technology can be leveraged to seamlessly coordinate haulage and grow trade in Africa. Lori has seen the cost of logistics drop by 20 per cent and the time taken by cargo from the port of Mombasa to Malaba cut down by up to five days since 2016.
By adopting new business models and technology, African economies can rethink logistics and deliver efficient trade on the continent. This will make all market participants more efficient, leading to more inclusive growth.
