Sustainable logistics - a key conduit for trade in Africa

Africa accounts for 2.84% of the world's GDP in nominal terms. However, Africa is yet to be integrated into the global value chains and realize its true economic potential as the continent also suffers from low regional integration in trade and movement of goods and a broken supply chain.

The adoption of ‘sustainable logistics’ is slowly gaining ground and it involves prioritizing sustainability and a reduced environmental footprint and minimized impact of logistics activities when it comes to freight, logistics, and supply chain practices. While logistics in Africa is in a recovery mode post the pandemic, two factors that will shape its future is the digitization of logistics, the embracing of new technology, and sustainable logistics in African markets.

Digitalization has been making significant inroads into Africa be it in minimizing physical documentation through digitization of systems or using AI in improving the efficiency of supply chains for prediction, route planning, and managing warehouses and combining it with transportation and fleet management, or using cloud technology or using the Internet of Things to track temperature and track shipments in transit, digitalization is key.

Tristan Koch, Chief Commercial Officer, Awery told delegates at the Air Cargo Africa conference in Johannesburg, South Africa, “The air cargo market across Africa is full of potential and stakeholders here will benefit hugely from a digital approach. We believe in an air cargo digital democracy, and by offering an open access version of our CargoBooking platform, we can help drive that transformation to the benefit of all players in the industry."

According to Briter Bridges, Africa's consumer spending is on the rise with the size of the market having reached $1.4 trillion. Data also showed that 28 African startups offering B2B commerce as a product have collectively raised over $470 million in funding since 2008, with 90% of this amount raised between 2021 and 2022 alone. The funding is shared among seven geographies from the most to the least funded: Kenya, Nigeria, Egypt, Morocco, Senegal, South Africa, and Ghana.

Abdesslam Benzitouni, Group Head of Communication & Public Relations at Jumia said, "The use of data analytics and machine learning can help logistics companies to optimize their operations and reduce their environmental impact. By analyzing data on transportation patterns, fuel consumption, and other key metrics, logistics companies can identify areas for improvement and implement sustainable practices that reduce their carbon footprint and improve their overall efficiency.”

Christos Spyrou, CEO, Founder of Aero Africa says, “Africa has a chance to get ahead of the curve, some countries are leading the way, for example, Kenya which introduced electric buses, though nowhere near at scale yet. Others like Ethiopia are further along the road, having bequeathed the continent its first fully electric cross-border railway line, connecting Addis to Djibouti."

Raphael Kiptis, Head of Finance at Sian Roses in Kenya said, “For us to build sustainability, we need to reduce the cost of production. The cost of power in Kenya is quite high, so last year we implemented 1.7 MW solar in all our farms. The aim is to reduce the cost of power by 35 to 40%, which we have done."

According to Briter’s report, "Recent pan-African initiatives such as the AfCFTA, which came into force in July 2019 after hitting the minimum threshold of 22 ratifications, have great potential to integrate the continent’s value chain and promote intra-Africa trade, as well as facilitate more efficient cross-border processes and cohesive regulatory frameworks.”

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