- Africa’s trading environment and infrastructure are modernising as fast as the opportunities are presenting themselves.
- Dubai Ports in Tanzania seeks to transform trade in Africa partly through investing heavily in the digital infrastructure to help Africa keep up with demand.
- DP World also rolled in tools to reduce container vessel waiting times at some ports from five days to a matter of hours, which is particularly valuable for traders of perishable goods, and those taking advantage of the enormous e-commerce market in Africa
Have you ever asked yourself “why is Africa important to the world?”
Africa is important because the continent is rich in natural resources ranging from arable land, water, oil, natural gas, minerals, forests and wildlife. The continent also holds a huge proportion of the world’s natural resources, both renewables and non-renewables. But that is not the only reasons, the continent is important today because of its contribution to global trade leveraging on the resources she has.
But African trade is nothing new. Let us look at the short history of African trade. According to an article by African Business published on October 1, 2021, the very earliest evidence of African trade is described by Herodotus (c. 484-425BC) who wrote of the trade across the Sahara; a trade recorded in rock paintings dating from 10,000BC.
The rock paintings represent mules and horse-drawn wheeled carts that show that salt, ivory, animal skins and slaves were the major items traded northwards while manufactured goods such as pottery, glass and metalwork were traded southwards.
Further, the introduction of the technology that allowed humanity to move en-masse – from hunter-gatherer nomadic societies to a settled, agrarian lifestyle – was the adoption of the plough, first to north-east Africa (probably from near-east Asia) that also stimulated trade as surplus harvests were bartered.
Agriculture also boomed along the Nile Valley. Though often overshadowed by its Egyptian neighbours to the north, the Kingdom of Kush, just north of Khartoum stood as a regional power in Africa for over a thousand years. The Nubian empire reached its peak in the second millennium BC, when it ruled over a vast swathe of territory along the Nile River in what is now Sudan, building more than 200 pyramids.
The pre-colonial era saw a number of powerful civilizations rise and fall in Africa, from Carthage in the north to Great Zimbabwe in the south, and in West Africa the Songhai, Ghana and Mali empires.
Today Africa is famed for exporting its rich minerals across the world, population growth and rising per capita incomes also making Africa a potential for imports.
But Africa’s trading environment and infrastructure are modernising as fast as the opportunities are presenting themselves according to DP World. Dubai’s DP world seeks to transform trade in Africa.
DP World seeks to transform trade in Africa partly through investing heavily in the digital infrastructure to help Africa keep up with demand.
This includes inter-bank operability programmes and truck booking platforms, which have seen a reduction in vast cash payments at ports, better scheduling, and availability of inland transport providers.
The company also introduced CARGOES to the region, with an aim to bring greater value to customers and governments. With CARGOES, traders can also access essential information regarding bookings for their freight. In a few simple steps, they can see how long it will take a product to travel from the factory floor to the customer’s door – and what the cost will be. This enables everyone along the supply chain to book and pay safely to transport their goods – all from their phone.
Operating digitally is not just beneficial for traders – it also alleviates the pressure on regulators. Digital platforms, like CARGOES Customs, provide visibility, meaning customs officials can immediately see what is being transported, where it has come from, where it has stopped along the way, and the end destination. They can see if all the necessary documentation has been completed and if the relevant import and customs duties have been paid. These factors speed up the import and export process, reducing potential bottlenecks and delays at borders.
Previously cargo tracking, invoicing, payments, and vehicle booking would take weeks. The varied terrain and diverse travel and weather conditions in Africa, create an unreliability in the transportation industry, owing to the high probability of unforeseen conditions. Even when the packaging and drops are conducted on schedule, the transportation industry is often challenged by delays.
Traffic congestions, multiple checkpoints, and toll stations add to the woes. This translates into the Logistics companies losing out on a lot of time and money. In a nutshell, even after taking into consideration extra delays, more unforeseen delays cannot be ruled out.
Another major challenge is storage. The unfortunate plight of pitiable warehousing facilities in Africa is no secret. Cargos incur immense damage owing to pest-infested warehouses, damage due to leakages, lack of proper storage space, and much more. This is most predominant in case of low margin goods and cargo. Also, the Governments use the big warehouses to store grains, leaving very little space for cargo storage.
DP World also rolled in tools to enable enterprises to collaborate with local customs and banking institutions to roll out immediate payments to customers and introduce tracking services for trucking companies. This reduces container vessel waiting times at some ports from five days to a matter of hours, which is particularly valuable for traders of perishable goods, and those taking advantage of the enormous e-commerce market in Africa (which is projected to reach revenues of US$43 billion this year).
With smartphones and internet technologies becoming increasingly accessible in Africa, the continent has become a lucrative market for the e-commerce industry.
During 2020, the revenue generated by online shopping in Africa was estimated to be around US$27.97 billion, an increase of over US$6 billion since 2019.
In 2022, the African e-commerce industry is predicted to produce US$33.3 billion in revenue, following an increase of 19 per cent. Next year, the industry will grow by 14.7 per cent to US$ 38.2 billion. According to estimates made by Statista, the e-commerce revenue in Africa will keep increasing between 2021 and 2025. In 2025, the whole e-commerce sector in Africa might reach a value of over US$46.1 billion.
Africa is shaping up to be the next hotbed for internet-based businesses and DP World sees that. As smartphones and the internet become more prevalent in African countries, the population has started to shift towards online shopping.