Young African entrepreneurs are being encouraged to tap into opportunities the continent’s burgeoning logistics sector presents in the wake of continental trade.
Africa’s logistics sector described as being in its infant stages is still viewed as the lifeline on which the continental trade will survive and thrive, however, it is generally considered to be currently fragmented and disorganized.
One of the experts who views this glaring gap as a major opportunity is Nlaliban Wujangi, who is a Supply Chain Consultant with Supply Chain Hub Africa and the Regional Chairperson for CILT Next Generation who was speaking on the latest episode of Eye on Port.
“Our supply chains or our logistics services are now developing. If you do a cursory look into the services that are provided within the logistics framework, majority of it has got to do with freight forwarding, whereby you get a clearing agent who will haul your goods and does the clearing for you. Our logistics services are now evolving and as it evolves, I think this is about the best time for any business or any entrepreneur or any professional who wants to go into this particular sector to actually get his head in there so that as it evolves, you’re able to evolve with it and then get a lot more benefit out of it,” he said.
He averred that it will be beneficial for African entrepreneurs to learn from their foreign counterparts and specialize on specific logistics offerings to allow for efficiency.
The Director of the West Africa Regional Centre, CUTS International, Appiah Kusi Adomako, ESQ, on the same program, also emphasized the need for Small and Medium scale Enterprises (SMEs) in Ghana and Africa at large to cede the logistics components of their business to professional entities so they can provide efficient services while they focus on their core competencies.
“Unfortunately in Ghana, one thing you realize is that most people who are in businesses want to become 100% owners of all the processes. They want to grow the raw material, transport the raw material to their factory themselves, and at the end of the day, the efficiency reduces. We are beginning to see a new paradigm in Ghana where businesses have started seeing the need for them to specialize and some businesses have decided not to even own a truck,” he said.
Like Mr. Wujangi, the Director of the West Africa Regional Centre, of the international research and advocacy on multilateral trade, threw a challenge to young logisticians to provide solutions in the hinterlands of the country where logistic solutions are scarce.
“I know a poultry farm in Tamale that is able to slaughter close to 500 birds daily, and they need to be able to transport them to other parts of the country. They don’t have access to cold chain delivery but of course most of the cold chains are in the southern parts of the country and so if businesses can decide to transport your goods for you, then you (the poultry farmer) will be much more concerned about the production of your birds,” Mr. Adomako cited.
Referring to a World Bank Report that indicated West Africa as the most expensive so far as logistics services are concerned, Appiah Kusi Adomako continued that, for Ghana to have sustainable supply chain structures, macroeconomic elements such as inflation and the cedi depreciation should be reassessed.
Doing business, according to him, should be made more attractive so as not to drive away businesses looking to invest in the logistics sector.
Touching on the apparent struggles of the regional and continental free trade, the National President of Borderless Alliance, Ziad Hamoui, said it is necessary for political leaders to tackle challenges from the ground up, and be practical with their approach in collaboration with industry and other critical stakeholders.
He said it in efforts to have aspirations of integration and economic prosperity translate into reality, that African countries must begin to align national laws to regional laws and regional laws with continental laws and processes.
According to him, economies of scale are driven by mass production which can be boosted by creating the enabling environment for businesses to thrive. He supported the call for the creation of incentive-driven industrial zones in Ghana and other African countries.
“So you need first of all to find a way to bring these scattered industries, manufacturers and service providers to bundle them together into groups and then you provide them with services that will make them more competitive and to lower their costs, be it production cost, sales cost, marketing costs, and all of that. There are tools you can use on a policy level. You can specifically target some of the areas where you have high costs in certain areas and then you design and formulate your policies in a way where you can reduce their burden,” he recommended.
The various resource persons on Eye on Port last Sunday unilaterally argued for expedited processes that will lead to the harmonization of customs and other border processes in the continent to make room for the growth of the logistics sector in Ghana.
