Google Maps 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. The route covers a distance of almost 3,300 miles and takes you through the Central African Republic and South Sudan – countries currently ravaged by conflict – and down through Uganda. Along the way, you will encounter large potholes, 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 due to a lack of “open skies” agreements signed between African countries.
By contrast, a non-stop, 2,800-mile drive from New York City to Los Angeles 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 countries diversify their economies away from natural resources and to deliver sustainable economic growth. The announcement that the African Union will soon begin issuing e-passports, permitting 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 in order 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, has gone from strength to strength and has the potential to be worth more than $20bn within the next 10 years.
Thanks to fast-growing internet and mobile penetration rates, and emerging warehousing and logistics businesses, online stores like 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 keen 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 are assumed to contain valuable items. But home-grown private logistics companies are shipping more and more products bought online from international stores.
In Nigeria, it is estimated that online purchases from international online stores have helped create a $500 million e-commerce industry with major international brands like Amazon and Asos now accepting online orders from Nigeria.
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.
Greater cooperation between African countries and development finance institutions to deliver cross-border transport projects will open up new markets for businesses to trade, creating wealth and employment along new transport corridors in the process.
For example, the Enugu Bamenda highway, completed in 2013, connects Nigeria to Cameroon and ferries goods and people between the two countries. Even the street sellers along the sides of the road have seen their incomes increase with the passing of more traffic.