Africa's Logistics Market Ballooning, Study Finds

Africa's Logistics Market Ballooning, Study Finds

Logistics spending in Africa by manufacturers and retailers (both in-house and outsourced) is set to increase by almost $28.8 billion by 2016, as the size of the outsourced logistics market increases by 38.4 percent, according to an “Africa Logistics” report by Analytiqa.

The study of eight markets across the region predicted that Kenya, Morocco, Nigeria and Uganda stand to gain the most, and South Africa, the largest and most developed contract logistics market on the continent, will post a compound annual growth rate of more than 4 percent.

The research found that food commodities and agri-business will play an “important role” in growth of the African logistics market, shifting from the “grow it, ship it” model toward higher levels of food processing, which will create opportunities for third-party logistics providers, particularly for cold-chain services.

However, inefficiencies in infrastructure, construction and supply chain industries, as well as challenges arising from labor relations and bureaucratic blocks, could be problematic for 3PLs, the study said.

“We are seeing European fashion brands and Chinese automotive manufacturers now locating in Africa, aiming to tap into the continent’s impressive potential, which has some commentators calling Africa ‘the new Asia,’” said Mark O’Bornick, Analytiqa’s research director, in a written statement.