We’ve all seen those global maps illustrating the severe lack of land transport, internet hardware, air traffic routes and a whole host of other infrastructure in Africa, compared to other regions. We’ve also seen the zoomed-in maps showing how infrastructure is worse within and across the continent, in comparison to overseas markets.
These patterns are legacies of slavery and colonial trade patterns that, unfortunately, continue today. The patterns explain why African countries have low-value trade patterns — not only with the rest of the world, but also with each other. Infrastructure investment tends to be justified on business cases and feasibility studies that are highly linked to commodities, rather than manufacturing potential or human capital.
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Yet, this infrastructure is necessary for efficient and speedy supply chains.
To give an example, one of Africa’s largest countries, the Democratic Republic of Congo, a country 10 times the size of the UK, has a so-called “national route” across the country and into the capital city Kinshasa. Yet, this route requires unloading and loading of goods eight times — from rail to waterways to road and so on.
These logistics are a key reason why, for instance, the African continent is a net exporter of fertiliser. Yet, when the Russia–Ukraine war broke out, many African countries and the UN were concerned about fertiliser shortages.
The relative lack of logistical infrastructure is as much of a break — if not more — to the African region’s trade and development as bribery by customs officials or tariffs. The Asian Infrastructure Investment Bank has just published evidence that poor infrastructure in low- and middle-income economies contributes to larger trade deficits.
Indeed, in many ways, Africa’s current role in the world — accounting for under 5% of global trade and foreign direct investment while primarily net importing — is somehow hardwired through these infrastructure patterns. The laudable African Continental Free Trade Area, the largest in the world and which has just welcomed its 44th ratification from the 55 African countries, aims to overcome such constraints.
Yet, so often, efforts by governments and international partners to improve the efficiency and resilience of supply chains in the region focus on trying to cut tariffs or corruption, and not logistical infrastructure. They focus on increasing the speed of goods flowing, not the volume of goods or their value.
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Why? It is difficult and costly to bring African levels of infrastructure closer to those seen in the rest of the world. Africa is around three times the size of China — new routes are difficult to forge, given environmental and social safeguards.
However, as my firm has explained in a new report, global growth is intertwined with the success of Africa’s supply chains. If they remain meagre, increasingly costly manufacturing will be unable to offshore from China to African countries. This is a missed opportunity, given that Africa will be the global region with the highest amount of low-cost, young and energetic labour over the decades ahead.
Global growth is intertwined with the success of Africa’s supply chains.
If Africa’s supply chains remain sparse, global firms — whether from the US, UAE or France — will be unable to tap Africa’s consumer markets, unable to maintain or grow fintech and e-commerce firms, and ultimately lead to rising global costs of consumption.
That’s why African governments and investors should make logistical infrastructure their major focus now — whether it’s filling in air freight routes, building warehouses and cold-storage systems, constructing industrial parks or establishing new rail routes. Africa’s own supply chain patterns need disruption, so that global supply chains can really survive and be resilient into the long-term.
Hannah Wanjie Ryder is the CEO of consultancy Development Reimagined and senior associate at the Center for Strategic International Studies Africa Program.
E-mail: hannahryder@developmentreimagined.com
This article first appeared in the October/November 2022 print edition of fDi Intelligence.
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