Page 12 - LUA May - June 2023 for Magzter

SPOTLIGHT

Sustainable logistics
A KEY CONDUIT FOR

TRADE IN AFRICA

While Africa cannot afford to wait for conducive
infrastructure and political will to propel it to
its true economic potential, can the delivery
of quality logistics aided by digitalisation
of supply chains, adoption of sustainable
logistics, and policy reforms like AfCFTA
set the ball rolling to push the
continent out of its current crisis?
Lakshmi Ajay reports.

ccording to the International
Monetary Fund World
Economic Outlook (October
A2021), the African economy,
comprising 54 countries, in 2021 was
projected around $2.7 trillion in nominal
terms, $296 billion more than 2020,
calculated by taking figures from the IMF.
Essentially Africa accounts for 2.84% of
the world GDP in nominal terms.
Yet owing to its many infrastructural
and systemic challenges, Africa is yet to be
integrated into the global value chains and
realise its true economic potential as the
continent also suffers from low regional
integration in trade and movement of
goods and a broken supply chain.
Many African nations are currently
struggling with high inflation, political
instability, debt burdens, an ongoing food “big funding
crisis, natural disasters, and mitigating squeeze”, tied to
the risks of climate change. the drying up of aid
The Covid-19 pandemic brought and access to private
further disruption to global supply finance, hits the region.
chains, bringing with it huge input costs This is reportedly the second
and increased demand followed by a dip consecutive year of an aggregate
in consumer demand and inflation after decline in SSA growth.
lockdowns were lifted globally in mid- The logistics sector is a vital
2021 and after the Russia-Ukraine war backbone that carries a nation’s economy
began in 2022. and delivers on its trade potential. There
As per the April release from the is a growing belief that digitalisation of
International Monetary Fund (IMF), logistics and adherence to sustainable
growth in sub-Saharan Africa (SSA) practices will be the driving force behind
is expected to slow to 3.6 percent as a how the African markets will grow.

10 LUA MAY - JUNE 2023