Logistics in Africa
Oct 16th 2008 | MOMBASA
From The Economist print edition
Connectivity and commitment pay dividends in African transport
ASIDE from a few niche industries such as cut flowers, which are air-freighted from Kenya and Ethiopia to auctions in the Netherlands, African trade has not changed much since the end of the colonial era. Unprocessed raw materials go out; finished goods come in. The trade imbalance is vividly illustrated by the ships sent from Asia to pick up empty containers left at African ports. Within Africa, moreover, it is difficult and costly to move goods. The continent has only a few broken-down railways. It has nothing resembling a ...view middle of the document...
Growth since has been rapid and mostly profitable. As a port operator, stevedore, warehouser and freight forwarder, Bolloré handles 80% of west Africa’s exports (excluding oil) and 25% of east Africa’s—in short, nearly all of Africa’s cotton and cocoa, as well as much of its coffee, rubber, and timber.
With offices in 42 African countries and 20,000 of his 31,000 employees based in Africa, Mr Bolloré is bullish on the continent’s prospects. Bolloré Africa Logistics accounts for $2 billion of the group’s $10 billion annual revenues. Its head, Dominique Lafont, predicts 12-17% annual growth for the division for the next five years. He believes better logistics are vital to reduce poverty in Africa. A new warehouse for perishable goods, or a new garage for repairing overland lorries, he reckons, create more lasting benefits to Africans than most aid projects do.
Bolloré’s aim is to exploit the massive unrealised potential for trade between African countries by being the first to link the economies of the Francophone and English-speaking parts of Africa. It wants to do this by establishing a 26,000km (16,000 mile) pan-African network of “vital corridors”, making use of whatever infrastructure is available, with long sections of transit by barge down the Niger, Congo, and Nile rivers deep into the interior.
Ports and “dry ports” (depots with customs-bonded warehouses) are probably the easiest part of Africa’s logistics network to fix. Bolloré was among 100 firms, “15 of them serious”, says Mr Lafont, to tender for the right to operate a new port outside Lagos in Nigeria. It already runs several other west African ports, hopes to be reconsidered for the Dar es Salaam port in Tanzania, and wants to compete with Dubai World’s Djibouti port, which has a monopoly in the Horn of Africa, by developing the port of Berbera in former British Somaliland. Bolloré’s biggest bet was on Abidjan port in Côte d’Ivoire, where it invested heavily despite a prolonged civil war, reducing the handling time of containers in the port from eight days to two.
Ivorian officials say Bolloré’s...