The Future of African Trade: Overcoming Logistics Challenges

By Mohammed Akoojee, CEO and Managing Director, DP World Sub-Saharan Africa

Africa stands at a pivotal moment in its economic journey. As trade grows across the continent, fueled by rising consumption and increased investment, the African Continental Free Trade Area (AfCFTA) has emerged, creating a formidable $3.4 trillion economic bloc. However, this promise is hindered by the stark reality of soaring logistics costs, which range between 20-40% of product value—nearly four times the global average. This discrepancy poses a significant barrier to competitiveness and highlights the challenges of poor infrastructure, complex regulations, and inefficiencies in the logistics sector.

Intra-African trade still languishes at approximately 15% of total African trade, starkly contrasted with 70% in Europe and 50% in Asia. Africa contributes a mere 2-3% to global trade. Given its vast population and rich resources, the potential for a more substantial contribution is clear. The pressing question is not whether Africa can compete globally but whether we are fostering an environment conducive to this competition.

Infrastructure Alone Isn’t Enough

At DP World, our commitment to Africa has seen us invest nearly $3 billion to date, with plans for an additional $3 billion over the next three to five years. This investment targets ports, logistics hubs, and multimodal connectivity throughout sub-Saharan Africa, establishing critical nodes in the continent’s evolving trade landscape. Our vision encompasses the creation of integrated ecosystems that marry modern port infrastructure with special economic zones and cutting-edge digital platforms.

We’re currently developing deep-water ports in Ndayane, Senegal, and Banana, Democratic Republic of Congo. In addition, we’re expanding capacity at the Port of Maputo and enhancing the Maputo Corridor to South Africa, creating a more efficient link between key trade hubs in the Southern African Development Community (SADC). Our efforts also include substantial upgrades at the Port of Dar Es Salaam and multimodal logistics platforms in Rwanda that connect inland markets to coastal export opportunities.

However, even the finest infrastructure cannot resolve Africa’s competitiveness challenges on its own. State-of-the-art facilities will remain underutilized if regulatory frameworks deter investment and if customs processes remain cumbersome. Truck turnaround times at certain corridors can stretch to 60 or even 70 days, compounding inefficiencies.

The Ecosystem Imperative

For Africa to thrive, it must develop an integrated trade ecosystem where physical infrastructure, digital platforms, regulatory frameworks, and multimodal connectivity function harmoniously.

Picture a scenario in which a container arrives at one of our ports, destined for a landlocked country. The cargo might navigate through two or three borders, with each requiring separate customs clearance and inspections. The result? Delays that turn days into weeks, all while costs continue to mount.

Now, envision a digital customs platform that allows for single clearance across multiple borders, harmonizing regulations and eliminating redundancies. Real-time cargo tracking could provide visibility from port to destination, significantly shortening lead times and reducing costs. This is the vision we aspire to—transforming our ports into gateways for opportunity and agents for regional economic transformation.

Technology as an Enabler

Digital transformation is not merely a luxury; it’s an urgent necessity for African logistics. Implementing technology platforms to digitize customs processes can eliminate manual paperwork, reduce processing times, and foster transparency that enhances trust between traders and authorities.

Across our global operations, we’ve witnessed how digital solutions revolutionize efficiency. Real-time cargo tracking offers unprecedented visibility to businesses. Automated documentation minimizes errors and accelerates clearance, while predictive analytics optimize routing and diminish delays—boosting sustainability outcomes in the process.

These digital platforms lay the groundwork for regional integration, enabling connectivity essential for the AfCFTA’s realization.

Regional Integration: From Agreement to Action

The AfCFTA symbolizes Africa’s boldest economic vision—a unified market comprising 1.3 billion people with a cumulative GDP exceeding $3 trillion. However, transitioning from theoretical agreements to tangible action requires creating an ecosystem of infrastructure, harmonized regulations, and digital connectivity.

Realizing regional integration entails constructing robust trade corridors that link production centers with ports, ports with markets, and markets with one another. Moreover, seamless transitions between sea, rail, and road transport, coupled with special economic zones that attract investment, are essential for fostering a competitive operating environment.

The Partnership Imperative

Addressing Africa’s logistics challenges cannot be the responsibility of a single entity; it necessitates collaboration among public and private sectors, countries, and between infrastructure providers and policymakers. Investors are motivated by the quality of their surroundings, not merely by the facilities they operate.

Through engagement with government stakeholders about policy frameworks and advocating for regulatory reform in digital customs, we aim to benefit the broader ecosystem, not just our operations. Efficient trade flow through African ports enhances the prosperity of all constituents, from importers and exporters to consumers and local communities.

Importantly, we also focus on empowering communities through trade. Investing in local development is central to our business strategy, highlighted by our commitment of $4.5 million in Sub-Saharan Africa community investment projects in 2024, facilitated through DP World and DP World Foundation initiatives.

The Path Forward

Today’s infrastructure investments—including ports, logistics hubs, and special economic zones—will shape Africa’s future for the next half-century. It is critical to assess whether we are constructing these systems within integrated ecosystems that allow them to realize their full potential.

We cannot accept infrastructure that remains underutilized due to an unfriendly regulatory environment or antiquated customs processes that delay shipments for weeks. Maintaining logistics costs that are quadruple the global average while expecting African businesses to compete on the world stage is untenable. Prioritizing the establishment of integrated trade corridors—where infrastructure, technology, and policies converge—will be vital for reducing costs, enhancing efficiency, and unlocking the competitiveness that enables African businesses to thrive.

As a steadfast partner in Africa’s growth journey, we are dedicated to building the ecosystems that foster job creation, facilitate trade, and drive sustainable prosperity, all critical to defining Africa’s economic future for generations to come.