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Transport infrastructure is a key facilitator for the efficiency of a company’s supply chain. Due to significant improvements in transport infrastructure within Sub-Saharan Africa, logistics in the region should also see positive impacts. This briefing will investigate transport infrastructure development in Angola, Ghana, Kenya, Nigeria, Mozambique and Tanzania, and its impact on the logistics market.
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Mega Trends Driving Transport and Logistics Mega Trends Driving Transport and Logistics in Subin Sub--Saharan AfricaSaharan Africa
Trade Corridors Spur Regional IntegrationTrade Corridors Spur Regional Integration
Sarah O’Carroll, Industry Analyst
InfrastructureInfrastructure
© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
Today’s Presenter
Sarah O’Carroll, Industry Analyst
Frost & Sullivan
Africa
2
2+ years of market intelligence and consulting experience in cross
industries such as infrastructure, water and wastewater and facilities
management. Particular expertise in conducting growth consulting studies
and developing market entry and geographic expansion strategies.
Focus Points
3
1
2
4 Current state of transport infrastructure
Trade forecasts for Sub-Saharan Africa
Current state of cross border trading
Current state of logistics
3
5
Development drivers6
Trade Corridors in Sub-Saharan Africa7
Conclusions8
Mega Trends driving transport and logistics
Trade in Sub-Saharan Africa is estimated to triple over the next two decades
240 617
45 181
4.6%
6.9%
2009 Trade Volume
(million tons)
2030 Trade Volume
(million tons)
CAGR (%)
Southern Africa
East Africa
Demand for consumer goods
Mineral and agricultural production
4
Source: Frost & Sullivan Analysis
Efficient transport and logistics systems are crucial to ensure that trade volumes are achieved
7 300
21 77
19.6%
6.4%
Africa
West Africa
Central Africa
Infrastructure development
Demand for raw materials
Significant institutional and policy reform is required in order to make Sub-Saharan countries competitive globally
Trade across borders ranking
(185 economies, 1=most efficient trading)
Burden of customs procedure
(1=extremely inefficient, 7=extremely efficient)
Documents to export
Documents to import
Time to export
(days)
Time to import
(days)
Cost to export
($/container)
Cost to import
($/container)
Singapore 1 6.2 4 4 5 4 $456 $439
Brazil 123 3.1 7 8 13 17 $2,215 $2,275
Russia 162 2.9 8 11 21 36 $2,820 $2,920
India 127 3.8 9 11 16 20 $1,120 $1,200
China 68 4.2 8 5 21 24 $580 $615
Global Competitiveness
5
South Africa 115 4.3 6 7 16 23 $1,620 $1,940
Angola 164 2.7 11 8 48 45 $1,850 $2,690
Ghana 99 3.4 7 7 19 34 $815 $1,315
Kenya 148 3.4 8 7 26 26 $2,255 $2,350
Mozambique 134 3.5 7 10 23 28 $1,100 $1,545
Nigeria 154 3.6 10 10 24 39 $1,380 $1,540
Tanzania 122 3.4 6 10 18 31 $1,040 $1,565
Although West Africa performs poorly overall, Ghana is currently the most efficient trading economy.
Source: Frost & Sullivan Analysis
Infrastructure development is the key driver for improvements in the Logistics Performance Index
Key Trade Metrics (1=low and 5=high)
SingaporeSouth Africa
Angola Ghana KenyaMozam. (2010)
Nigeria Tanzania
Logistics performance index: Overall
4.13 3.67 2.28 2.51 2.43 2.29 2.45 2.65
Efficiency Trend (2007-2012) - ▲ ▼ ▲ ▼ - ▲ ▲
Ability to track and trace consignments
4.07 3.83 2.00 2.31 2.34 2.28 2.35 2.77
Competence and quality of logistics services
4.07 3.56 2.00 2.68 2.38 2.2 2.52 2.64
Ease of arranging competitively
Efficiency of Logistics (2012)
6
Ease of arranging competitively priced shipments
3.99 3.50 2.26 2.81 2.69 2.77 2.60 2.91
Efficiency of customs clearance process
4.1 3.35 2.33 2.33 2.08 1.95 1.97 2.17
Frequency with which shipments reach consignee within scheduled or expected time
4.39 4.03 2.59 2.76 2.88 2.4 2.92 2.97
Quality of trade and transport-related infrastructure
4.15 3.79 2.48 2.05 2.16 2.04 2.27 2.41
In low-to-middle income countries, improvements in infrastructure can improve the LPI by as much as 10%. Improvements of services from logistics companies and customs
have a lesser impact. Source: Frost & Sullivan Analysis
Current State of Transport Infrastructure
Southern West East Central
Container dwell times
4-8 days 11-30 days 5-28 days -
Truck cycle times 2 to 12 hours6 hours to more than one day
3.5 hours to one day -
Freight transported by rail
85% 11% 2% 2%
Key Transport and Logistics Infrastructure Metrics, Sub-Saharan Africa, 2010
7
Source: World Bank and Frost & Sullivan Analysis
by rail
Average travel speed 11.6 km/hr 6.0 km/hr 8.1 km/hr 6.1 km/hr
Road trade density 27.9 $ million/km 8.2 $ million/km 5.7 $ million/km 4.2 $ million/km
Roads in good condition
100% 72% 82% 49%
Southern Africa outperforms the rest of the region; infrastructure is in good condition, ports are more efficient and railways are utilised.
Mega Trends Driving Transport and Logistics in Sub-Saharan Africa
Future Infrastructure Development
Regional IntegrationMega Cities and Mega
Regions
8
Rapid urbanisation across the African continent will result in
the development of mega cities and mega regions.
In order to increase global competitiveness, the
development of multimodal transport networks will
become a necessity.
Regional integration will unlock economic potential of landlocked countries leading
to better inter-dependence among cities and regional
growth.
Increasing Agricultural and Mineral Production Drive Development
C
CC
C
BB
B
Mineral Reserves, Africa
UraniumNamibia, Niger, Botswana, Zambia and Tanzania
Coal South Africa, Mozambique and Botswana
Iron OreSierra Leone, Guinea, Liberia and Rep of Congo
Copper Zambia, DRC and Rep. of Congo
Mining Projects in Africa
9
Source: World Bank and Frost & Sullivan Analysis
C
B Bauxite
Uranium
Gold
Copper
Diamonds
Oil
Gas
Timber
Main Reserves
Iron Ore
Coal
CC
C
C
Agriculture Projects in Africa
Tobacco Malawi, Zambia
Forestry Mozambique
Sugar Malawi, Mozambique
$28 billion is being invested in the development of trade corridors in Sub-Saharan Africa
Trans-African Railroads Trans-African Highways
Current rail
networks in Trans-African
10
Source: Frost & Sullivan Analysis
Sub-Saharan Trade Corridors are currently hindered by a significant lack of connectivity, and operational unreliability
networks in
SSA are
predominantly
in a poor or
disused state
Trans-African
Highways lack
connectivity in
central Africa
Trade Corridors offer several benefits in the long term
2
1
Enhance regional integration
Promote intra-African trade
Benefits of Trade Corridors:
3 Create access to new markets
11
Source: Frost & Sullivan Analysis
4
5
6
Support regional economic growth
Reduce the burden on roads
Decrease transport and logistics costs
3 Create access to new markets
Major transport projects aimed at improving logistics efficiency
$5.2 billion
Rehabilitation of railway to improve transhipment
$5.3 billion
Construction of a new port in
Northern Kenya
$2.23 billion
Railway linking
Tanzania to Rwanda
$1.4 billion
Tema-Accra railway link
12
*ba
se
d o
n a
ctive
pro
jects
in 2
01
1
$1.2 billion
Increase port capacity from 2.7 to 11.0 million tonnes
$2 billion
900km railway linking port of
Nacala to Moatize
$9.34 billion
1,100 km railway linking Botswana to Mozambique via
Zimbabwe , new port at Matatuine
$6 billion
Development of a new deep sea port
So
urc
e: F
rost &
Su
lliva
n A
na
lysis
Conclusions
What does it mean in the
long term?And in the mean time?
Links to mega Take advantage
Strategic sourcing
Implement Best-In-Class
13
Improved regulations and
procedures
Links to mega cities and mega
regions
Access to new markets
Reduced costs and transport times
Take advantage
of the challenges
to do business
better than your
competitors
Route-to-market
Operational efficiency
Next Steps
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join our GIL Global Community
14
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For Additional Information
Sarah O’Carroll
Industry Analyst
Infrastructure
(021) 680-3280
Sarah.O’[email protected]
Kudzanayi Bangure
Programme Manager
Infrastructure
(021) 680-3207
17
Guillaume de Bassompierre
Sales Manager
Infrastructure
(021) 680-3582
Samantha James
Corporate Communications
Africa
(021) 680-3574
