Executive Briefings

Cost of Logistics Services in Africa Can Be Very High, But There Are Some Bright Spots

The appalling state of infrastructure in much of Africa is greatly responsible for the high cost of logistics services on much of the continent.

Cost of Logistics Services in Africa Can Be Very High, But There Are Some Bright Spots

"Many studies have suggested that the logistics sector in Africa costs anything between six and nine times more than it does in Europe, Asia Pacific and the Americas," said Charles Brewer, the managing director of DHL Express, Sub-Saharan Africa.

In a recent visit to Uganda, Brewer said the poor infrastructure is hampering the entry of more multinational companies into the region due to high operational cost.

Further, Brewer said the bureaucracies spelt out by customs procedures are derailing faster economic growth in many parts of Africa.

"If you are in Europe, you can go from London to Paris and no one checks you at the border. If you are coming through Entebbe International airport as a passenger, it can take you up to two hours to get a visa. If you are taking goods through the border it will take you two or three days to be cleared," he said.

Despite the numerous challenges, the future is not all bleak for Uganda, Brewer said.

"Typically, investors see Uganda as a stable economic and social environment, in contrast to other countries in Sub-Saharan Africa. However, Africa has evolved significantly in the recent past and other countries could be seen as more robust and at times, easier to do business with.

"Markets like Rwanda are becoming increasingly attractive as they minimize legislation, paperwork and processing, making it easy to do business and move goods."

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"Many studies have suggested that the logistics sector in Africa costs anything between six and nine times more than it does in Europe, Asia Pacific and the Americas," said Charles Brewer, the managing director of DHL Express, Sub-Saharan Africa.

In a recent visit to Uganda, Brewer said the poor infrastructure is hampering the entry of more multinational companies into the region due to high operational cost.

Further, Brewer said the bureaucracies spelt out by customs procedures are derailing faster economic growth in many parts of Africa.

"If you are in Europe, you can go from London to Paris and no one checks you at the border. If you are coming through Entebbe International airport as a passenger, it can take you up to two hours to get a visa. If you are taking goods through the border it will take you two or three days to be cleared," he said.

Despite the numerous challenges, the future is not all bleak for Uganda, Brewer said.

"Typically, investors see Uganda as a stable economic and social environment, in contrast to other countries in Sub-Saharan Africa. However, Africa has evolved significantly in the recent past and other countries could be seen as more robust and at times, easier to do business with.

"Markets like Rwanda are becoming increasingly attractive as they minimize legislation, paperwork and processing, making it easy to do business and move goods."

Read Full Article

Cost of Logistics Services in Africa Can Be Very High, But There Are Some Bright Spots