Page 33 - Logistics News - Issue 01 - 2024.indd

AFRI CAN TR AD E

New study predicts 2024

African trade boom

New research commissioned by DP World and led by Economist Impact forecasts a booming African
trade landscape in 2024, with senior executives predicting a surge in intra-African trade fueled by
new trade pacts and tech investments.

owever, African firms remain cautious as inflationary While AfCFTA should help to reduce a significant amount
pressures, economic uncertainty and political of tariff barriers, long transport times and high costs due to
Hinstability threaten to impact growth. Over 26 percent significant border control and long waiting times, complex
of the executives surveyed identified heightened inflation customs and bureaucracy remain a concern. High transport
and economic uncertainty as the primary limitations on costs were cited as the second biggest challenge facing
expanding imports, a 7 percent increase on the previous year. businesses when increasing both their import and export sales.
Additionally, nearly 20 percent pointed to political instability
in crucial source markets as their primary constraint, up 4 In response, businesses in Africa are increasingly investing in
percent year-on-year. technology to adapt. Notably, 38 percent of executives identified
the use of digital tools for improved inventory management
The latest Trade in Transition study captured the as the primary strategy to reduce overall trade and supply
perspectives of African trade experts and senior executives chain costs in Africa. Further, 45 percent of executives plan to
during a period of unprecedented transformation as heightened implement advanced automation and robotics to gain real-time
global geopolitical risk, climate change and significant insights and forecast disruptions in their supply chains in 2024.
advancements in technologies create both challenges and
opportunities. This aligns with global findings, which reveal that executives
across all sectors and regions found technologies that improve
African business poised for intra-African trade supply chain efficiency and resilience to be by far the main
growth source of optimism for the future of global trade.
In light of the African Continental Free Trade Area (AfCFTA),
executives across the continent expect intra-regional trade “Regional trade agreements, exemplified by AfCFTA, stand
to grow in 2024. Some 28 percent of the surveyed business out as powerful tools to address the intricate challenges within
leaders expect sub-Saharan Africa to be their largest export the region’s trade and supply chain infrastructure,” shares
market this year, up from 19 percent of respondents the Mohammed Akoojee, CEO and Managing Director, sub-Saharan
previous year. Only Europe (38 percent) and North America (34 Africa at DP World. “The nine percentage point increase in the
percent) rank higher in the list of regions expected to provide the proportion of Africa-based executives projecting that sub-
greatest contribution in terms of export sales. Saharan Africa will be their biggest export market is a case in
point. The synergy of public and private sector partnerships
Almost three-quarters agreed that government actions, to enhance investment, strengthened trade agreements and
such as enhancing regional trade agreements, have positively technological advancements also position the continent for
impacted their supply chain strategies. This highlights the growth and resilience.”
significant role governments can play in creating a favourable
environment for business growth and trade expansion. John Ferguson, Global Lead, New Globalisation at
Economist Impact, adds: “The findings of this report reveal
Technology set to increase resilience and a remarkably positive outlook for African trade in 2024 and
efficiency shed light on the beneficial effects of trade agreements like
In the face of persistent challenges posed by systemic issues AfCFTA. Through such regional cooperation, economies can
and political instability, businesses across Africa are strategically leverage scale, enhance competitiveness and attract significant
embracing technology as a transformative investment. investment across the continent. •

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