Africa Performance

8/3/2019 Africa Performance

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AFRICA

Africa is the world's second-largest and second most-populous continent, after Asia. At about 30.2

million km (11.7 million sq mi) including adjacent islands, it covers 6% of the Earth's total surface area

and 20.4% of the total land area. With 1.0 billion people (as of 2009, see table) in 61 territories, it

accounts for about 14.72% of the world's human population.

The continent is surrounded by the Mediterranean Sea to the north, both the Suez Canal and the Red

Sea along the Sinai Peninsula to the northeast, the Indian Ocean to the southeast, and the Atlantic

Ocean to the west. The continent has 54 sovereign states, including Madagascar and various island

groups.

Africa, particularly central Eastern Africa, is widely regarded within the scientific community to be the

origin of humans and the Hominidae clade (great apes), as evidenced by the discovery of the earliest

hominids and their ancestors, as well as later ones that have been dated to around seven million yearsago including Sahelanthropus tchadensis, Australopithecus africanus, A. afarensis, Homo erectus, H.

habilis and H. ergaster with the earliest Homo sapiens (modern human) found in Ethiopia being dated

to circa 200,000 years ago.

Although it has abundant natural resources, Africa remains the world's poorest and most

underdeveloped continent, the result of a variety of causes that may include the spread of deadly

diseases and viruses (notably HIV/AIDS and malaria), corrupt governments that have often committed

serious human rights violations, failed central planning, high levels of illiteracy, lack of access to foreign

capital, and frequent tribal and military conflict (ranging from guerrilla warfare to genocide). According

to the United Nations' Human Development Report in 2003, the bottom 25 ranked nations (151st to

175th) were all African.

Poverty, illiteracy, malnutrition and inadequate water supply and sanitation, as well as poor health,

affect a large proportion of the people who reside in the African continent. In August 2008, the World

Bank announced revised global poverty estimates based on a new international poverty line of $1.25 per

day (versus the previous measure of $1.00). 80.5% of the Sub-Saharan Africa population was living on

less than $2.50 (PPP) a day in 2005, compared with 85.7% for India


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WEST AFRICAS PERFORMANCE

West Africas overall performance lagged behind most regions as measured by theInternational

LPI, only surpassing Sub-Saharan countries. In general, West Africa fared in line with its per

capita income, performing only marginally better than the Low income country group.

In terms of individual countries, Senegal and Benin are the best performers within the region

ranked 58th and 69th out of 155 countries-, while Guinea-Bissau (149th) and Sierra Leone

(153rd) are last in the overall LPI ranking.


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These results also suggest that Western African countries can be classified in three categories

according to their logistics environment. The conclusion of the Connecting to Compete report

suggests that countries should be classified in four broad groups: High performers, consistent and

partial performers, and logistically constrained economies. Senegal is the only consistent

performer in this group -Senegal engaged early in facilitating measures and investment (e.g.

Gainde)- followed by nine partial performers, leaded by Benin. Finally, Liberia, Mali, Burkina

Faso, Guinea-Bissau and Sierra Leone are logistics constrained countries.

LOGISTICS BOTTLENECKS

TheDomestic LPIprovides additional information useful to identify logistics bottlenecks, using

qualitative (respondents assessments about the logistics environment in the country they are

based in) and quantitative information, such as time and cost to import and export.


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The measured time and cost indicators for Western Africa represent a clear indication of the

logistics challenges that trade operators face in this region. Compared to other regions, average

lead times for imports in West Africa are the largest in the developing World.

Also, import costs for West African countries are noticeably higher than in the rest of the regions

(up to 40% more) mainly due to lack of port reform and multiple interventions by publicorganization (shippers councils, etc) that add to the cost.

However, recent evidence indicates that predictability can be even more important than time and

cost for logistics performance. In this regard, 73% of the logistics operators report that timely

deliveries are infrequent or rare. This percentage is the highest among all regions, including

MENA (61%) and Sub-Saharan Africa (68%).

The assessment of logistics professionals also matches the quantitative information gathered in

theDomestic LPI. Exports (imports) delivery times in Western and Central Africa can be as

much as 7 times (3 times) more unpredictable compared to the average developing country,measured by the standard deviation from the mean lead time.

INFRASTRUCTURE IS NOT A MAJOR CONSTRAINT, BUT STILL NEEDED IN THE

TRADE FACILITATION AGENDA

According to the qualitative information collected from logistics professionals, trade supporting

infrastructure does not result in a major constraint for Western African countries, in relation to

other regions in the continent, or even the low income economies group. This region appears to

outperform MENA and Sub-Saharan Africa most importantly in port, airport and road

infrastructure.

In contrast, rail infrastructure quality is remarkably low in comparison with the same group of

countries. As seen, railroad quality of service is also lagging in West Africa, therefore calling for

facilitation initiatives to further develop and promote the use of this transport mode.


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SOUTHERN AND EAST AFRICAS PERFORMANCE

East Africas overall performance lagged behind all regions as measured by theInternational

LPI, while Southern Africa is ranked second within the continent. While Southern African

countries fared only marginally worse than the average Lower middle income country, Eastern

African economies are positioned well below the low income countries mean LPI score.


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In terms of individual countries, South Africa and Uganda are the best performers within these

regionsranked 28th and 66th out of 155 countries-, while Eritrea (154th) and Somalia (155rd)

are last in the overall LPI ranking.

Eastern and Southern Africa include countries with very different level of services development,

investment in infrastructure, and implementation of facilitation initiatives. While South Africa

has a

logistics system comparable to Europe, the horn of Africa has been identified as the most

problematic area worldwide. Several low income countries in the region, such as Uganda, have

experienced positive trends like South Africa. However, several of the countries are landlocked

or island states, which imply lower connectivity levels with the rest of the World.

The conclusion of the Connecting to Compete report suggests that countries should be classified

in three broad groups: High performers, consistent and partial performers, and logistically

constrained economies. South Africa is the only High performer in this group, followed by seven

partial performers, leaded by Uganda. Finally, Botswana, Mozambique, Zambia, Angola, Sudan,

Rwanda, Namibia, Eritrea and Somalia are logistics constrained countries.

While income remains an important determinant of a countrys logistics environment, it does not

account for all variations across performance levels. Since many of the countries are relatively

small economies with higher confidence intervals, the rankings upper and lower bounds tend to

be wider than in other parts of the World. Therefore, the exact position in the ranking between

South Africa and Somalia has some degree of uncertainty.


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LOGISTICS BOTTLENECKS

TheDomestic LPIprovides additional information useful to identify logistics bottlenecks, using

qualitative (respondents assessments about the logistics environment in the country they are

based in) and quantitative information, such as time and cost to import and export.

The measured time and cost indicators for East Africa represent a clear indication of the logistics

challenges that trade operators face in this region. Average lead times for exports in East Africa

are the largest in the developing World, while imports times are the second largest.

Source: LPI 2010; Note: Lead time is the transport time (in days) for export and imports from the

point of origin to the port of loading, or equivalent or to the buyers warehouse. Costs are the

dollar amount paid for a 40 dry container or a semi-trailer.

Also, import costs for Southern African countries are the second highest among developing

economies (up to 40% more than in other regions), and only surpassed by Western Africa.

However, recent evidence indicates that predictability can be even more important than time and

other costs for logistics performance. In this regard, almost 30% of the logistics operators based

in East Africa report that timely deliveries of imports are infrequent or rare.

This percentage is the highest among all regions, including Western (5%), Southern (7%) and

Northern Africa (19%).

The assessment of logistics professionals also matches the quantitative information gathered in

theDomestic LPI. Exports delivery in East and Southern Africa can be as much as 2 times more

unpredictable compared to the average developing country, measured by the standard deviation

from the mean lead time.


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THE CHALLENGE OF LOGISTICS IN TRADE CORRIDORS AND LANDLOCKED

COUNTRIES

Trade corridors are the arteries carrying trade within regions. They are directly relevant for

landlocked countries, which depend on them for their exports and imports to World markets.

Given that there are five Least Developed Landlocked countries (LLDCs), the performance ofcorridors is essential to trade and growth in East and Southern Africa.

This performance depends on a series of factors such as the quality of the system supporting

trade on corridors, infrastructure, availability and quality of logistics services (trucking), trade

and transport procedures, and above all, the transit regime

There are 5 landlocked economies in Eastern and Southern Africa measured by the LPI:

Botswana, Ethiopia, Rwanda, Uganda and Zambia. In turn, these landlocked countries export

and import goods through a grid of corridors running through neighboring transit countries. The

most relevant corridors are:


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East Africa

Addis Ababa (Ethiopia) Djibouti

Northern Corridor: Kigali (Rwanda) Mombasa (Kenya), through Kampala (Uganda)

Central Corridor: Bujumbura (Burundi) Dar es Salaam (Tanzania)

Southern Africa

Gaborone (Botswana) Durban (South Africa)

Gaborone (Botswana) Walvis Bay (Namibia)

Maseru (Lesotho) Durban (South Africa)

Mbabane (Swaziland) Maputo (Mozambique)

Blantyre (Malawi) Beira (Mozambique)

Lusaka (Zambia) Beira (Mozambique), through Zimbabwe

Lusaka (Zambia) Dar es Salaam (Tanzania)

Lusaka (Zambia)Durban (South Africa), through Zimbabwe

Blantyre (Malawi) Durban (South Africa), through Mozambique and Zimbabwe

Chipoka (Zambia) - Lilongwe (Malawi)Nacala (Mozambique)

In practice, landlocked countries inherently suffer from economic and time penalties compared

to coastal countries. In terms of export and import costs, Southern African countries without

access to sea ports face surcharges of 90%-180% vis--vis its coastal neighbors. In addition,

clearance times in Eastern Africas landlocked countries are almost 5 times higher compared to

those with port access in the same region.

Apart from unreliability costs, transporters on trade corridors operate under regulatory systemsthat can negatively affect productivity and impose an additional burden on landlocked countries.

While transport costs are not very different from levels


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found in other countries, prices charged on some corridors can be significantly higher. For

instance, between 60%-75% of all logistics operators based in East Africa assess that port,

airport and road transport rates are high or very high, whereas this percentage adds up to only

45% in the rest of the developing World.


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Documents

Africa Performance