Transport Infrastructure costs in Africa

My attention was caught by two articles in the recent South African Express Parcel Association (SAEPA) magazine. The first related to the need for better training for drivers in order to avoid accidents. SAEPA calculated that ecommerce deliveries increased by 16% last year. Accidents take a heavy toll on drivers, the vehicles, the contents and eventually on insurance costs and profitability. Better training is a win-win solution. The other article related to the carriage of dangerous goods and the need for better training of call centre and office staff. Some dangerous goods are packed unintentionally, but a small proportion are sent intentionally. Staff need to be trained to reduce cases of dangerous goods being sent in ecommerce fulfillment shipments. If in doubt please talk to your carrier!

South Africa stands almost alone on the African Continent with a well-developed transport infrastructure but the lack of infrastructure in other countries adds serious costs. According to the global property consultancy Knight Frank, the cost of transport takes up 50-75% of the retail price of goods. At the moment, farmers in Nigeria only expect about 50% of their produce to be delivered to distributors or buyers in a sellable condition, which in a Continent with serious poverty challenges is disastrious. But there is hope, from both foreign investment and home-grown solutions. For example, in Nigeria, digital start-up Kobo360 developed an app that revolutionises cargo delivery by making sure that everyone in the supply chain is connected to ensure the safety and accountability of cargo in transit. In the Senegalese capital, Dakar, more and more people are shopping online, and getting goods delivered is a growing trend amongst shoppers. Quicarry is a service that delivers packages in Senegal from international ecommerce websites, particularly targeting young adults. There are other start-ups in Senegal also trying to offer new solutions, such as delivery app Paps, which aims to deliver anything you want to your front door in half an hour.

But technology isn’t enough to fix Africa’s logistics problems – more support is also needed to help new businesses get off the ground. As the Development Bank of Africa points out the lack of sufficiently developed infrastructure reduces Africa’s average per-capita growth rate by 2.6%. Africa needs between US$130-170bn annually which it cannot presently reach.