In Summary
- Transnet plans to expand in a bid to increase its footprint on the continent
- The move is also motivated by the need to diversify in the wake of economic slowdown
- Logistics infrastructure deficit in Africa is hampering intra-trade according to World Bank
Africa’s biggest freight operator Transnet plans to expand in a bid to increase its footprint on the continent, South African public enterprises minister Lynne Brown has said.
The minister said that Africa’s biggest freight operator will be eyeing Senegal, Liberia, Nigeria, Ghana, Togo, Benin, the Democratic Republic of Congo and Kenya. She said that in some cases, Transnet will be partnering with local firms to thrive.
“These include possible joint ventures in areas such as rail and port opportunities, the development of infrastructure at ports and establishing transport corridors in those countries,” Brown said, as the continent has 15 landlocked countries requiring access to ports.
Brown believes that if Africa can address its logistics infrastructure deficit the quality of lives on the continent will immensely improve.
But the transport and logistic sector is plagued by a number of challenges, slowing what could be a rapid and continuous growth for increased competitiveness. This has resulted to low intra-trade in Africa.
In 2015, intra-African trade accounted for less than 18% of total continental exports. Among Key factors, underpinning these numbers is Africa’s logistics infrastructure deficit,” she said.
Based in South Africa, Transnet kicked off plans to explore markets in the rest of the continent two years ago when it adopted its Africa Strategy. The decision was reached in the wake of the economic slowdown in South Africa and worldwide.
According to a World Bank report only six of the 46 African countries ranked are in the top two categories, 18 are ranked as “partial performers”, and 22 are ranked “logistics unfriendly”.
The 2016 Logistics Performance Index of the World Bank shows that Germany tops in Logistics Performance while Luxembourg comes second. South Africa tops in Africa.
The World Bank believes logistics performance both in international trade and domestically is central to countries’ economic growth and competitiveness
The report is based on survey data from more than 1,200 logistics professionals. It ranks countries on a number of dimensions of supply chain performance, including infrastructure, quality of service, shipment reliability, and border clearance efficiency.