Google Maps very optimistically estimates that it would take 75 hours to drive non-stop from Lagos to Nairobi, the major commercial hubs in West and East Africa respectively. The route covers a distance of 5,300 km and takes you through the Central African Republic and South Sudan, currently ravaged by conflict, and down through Uganda. Along the way you will encounter large pot holes, flooded roads and creaking infrastructure.
Realistically this journey would take a week and there are few alternatives, especially for freight. There is no rail network connecting West and East Africa, and there are relatively few flights thanks to a lack of “open skies” agreements signed between African countries.
In contrast, a non-stop drive from New York City to Los Angeles, although a shorter 4,500 km, is estimated to take around 41 hours (and would actually take this long).
The greater ease of movement of goods, services and people across Africa is essential to helping African countries diversify their economies away from natural resources and deliver sustainable economic growth. The announcement that the African Union will soon begin issuing e-passports that will permit visa-free travel between member states is a welcome step in the right direction. It will help break down borders and encourage closer integration, which will spur trade, facilitate the movement of capital and create huge opportunities.
But we can and must do more.
Economic growth in Africa over the next 10 years will be driven by a range of sectors, including agriculture and manufacturing, which will unlock the continent’s potential. For this to happen, a pan-African transport infrastructure network will be needed so as to move goods from the farm to consumers and from the factories to markets.
In Nigeria, the emergence of local technology-enabled logistics providers, which have shipped to millions of customers and collected millions of dollars in payments on behalf of merchants in just a few years, has enabled new industries to grow and thrive. E-commerce, in particular, is a sector that has gone from strength to strength, and it has the potential to be worth over US$20bn within the next 10 years.
Thanks to fast-growing internet and mobile penetration rates and the emergence of warehousing and logistics businesses, online stores like Jumia, Konga and Mall for Africa have expanded rapidly. Not only that, offline stores have been able to go online for the first time. For example, last year Chicken Republic, one of the largest fast food retail outlets in Nigeria, became the first stand-alone fast food restaurant in the country to launch online and mobile ordering and payment.
International businesses are also increasingly less reluctant to attempt to ship products to Africa. Domestic national postal services are not able to cope, and packages often go missing or take weeks to be delivered if they are from abroad and assumed to contain valuable items. But home-grown private logistics companies are shipping more and more products bought online from international stores.
In Nigeria, Africa’s largest economy with a population of around 170 million, it is estimated that online purchases from international online stores have helped create a $500m e-commerce industry with major international brands like Amazon and Asos now accepting online orders from Nigeria.
How a more connected continent will help all Africans
Direct to consumer logistics can play a big role in increasing financial inclusion rates by getting much needed financial products, such as debit and credit cards, to consumers in remote parts of the continent where there is no access to a physical bank branch.
Greater cooperation between African countries and development finance institutions to deliver cross-border transport projects will open up new markets for businesses to trade, in doing so creating wealth and employment along new transport corridors.
For example, a tangible economic impact can be seen along the Enugu Bamenda highway, completed in 2013, that connects Nigeria to Cameroon. The highway now ferries goods and people between the two countries, opening up fresh opportunities. Even the street sellers along the sides of the road have seen their incomes increase with the passing of more traffic.
In the future, I hope that the transport and logistics infrastructure will be in place so that even Nigerian farmers will be able to accept an order and easily ship perishable produce quickly across the border to a customer based in Niger or Chad, and all managed from their phone – thus enabling them to grow their businesses and become wealth generators.
One delivery at a time, let’s keep building, let’s keep delivering opportunity and progress.
Author: Tunde Kehinde is the co-founder and co-managing director of ACE. This article was originally published by the World Economic Forum.