The Future of Trade & Logistics in Africa

At the recently held Kaufmann Venture Capital For Africa summit in Nairobi from September 10th to 13th, 2023, a VC conference which brought over 300 global investors to Nairobi, I had the opportunity to discuss The Future of Trade & Logistics in Africa. Here is a brief summary of my thoughts.

As the CEO of Kyosk.app, a digital distribution platform focused on enabling the distribution of goods and services into medium and low-income communities across rural and urban Africa, trade as a catalyst for economic growth in Africa is dear to my heart. Our mission is to fix the broken distribution chain to enable products and services to reach these underserved communities, where over 70% of retail flows in Africa. I believe what we are doing is unleashing a transformative era for this continent. Hence, the topic at hand, "Getting Africa Moving - The Future of Trade and Logistics," couldn't be more timely.

Moving people, goods, and services across African borders has long been plagued with a multitude of challenges, and we must recognize the hurdles we face:

• Suboptimal Border Processes, cumbersome customs procedures, excessive paperwork, and inconsistent enforcement of regulations have been major roadblocks to efficient cross-border trade.
• Self-imposed Trade Barriers, tariffs, and trade restrictions between African countries hinder the growth of intra-Africa trade and slow down the flow of people, products, and services.
• Gaps in the availability and quality of infrastructure, insufficient road networks, rail systems, and port facilities often lead to costly delays in the transportation of goods.
• Last but not least, limited access to digital technology and the internet in some regions has created a divide in logistics capabilities.

My recent experience, crossing from Rwanda into Uganda and back, took an hour and 20 minutes each way, even on a Sunday afternoon. It should not be so. That's almost 10% of the working day spent crossing the border. I can imagine it would be more if goods are involved. In the Schengen zone of the EU, it takes only a few seconds for people, goods, and services to cross from one country to the next.

Fortunately, innovative startups are coming up with solutions and emerging as beacons of hope in tackling some of these challenges:

• Companies such as MVXFreight in Nigeria are connecting suppliers and consumers with transporters through digital freight platforms, streamlining logistics operations and optimizing routes for cost savings.
• Local and international transportation is increasingly being organized by companies such as LoriSystems in Kenya and Kobo360, thereby automating the process of finding transporters and moving goods within and across borders while streamlining the documentation process.
• Other startups are working on automating customs processes, reducing paperwork, and accelerating clearance times.
• Finally, our company, Kyosk.app, is focused on building innovative last-mile delivery solutions that ensure goods reach even the most remote urban and rural communities effectively, thereby unleashing not only the purchasing power of over 70% of Africans but also creating access to markets for their products and services.

I hold true hope in the African Continental Free Trade Area (AfCFTA), which represents a huge opportunity for Africa and, in particular, for trade in many ways: AfCFTA opens up an expanded market, creating a single African market of over 1.4 billion people, leading to vast consumer markets for trade and for platforms like ours. The promise of the elimination of tariffs on 90% of goods promises to significantly drive trade growth, benefiting cross-border trade by reducing costs and increasing demand, and regional integration will lead to closer economic ties among African nations, catalyzing infrastructure development and fostering cooperation among logistics stakeholders.

To ensure the promise of AfCFTA is fulfilled, we must be proactive and adopt best practices, such as investing in transportation and logistics infrastructure by governments and private sector entities, streamlining and harmonizing customs procedures and regulations to facilitate smoother cross-border trade, leveraging technology and embracing digital solutions for customs clearance, real-time tracking, and route optimization to enhance efficiency and transparency, investing in skills development and workforce training to ensure a well-prepared labor force capable of managing modern logistics systems, and so on.

The promise is not without its fair share of challenges, though. As I crossed the Rwanda-Uganda border and back, I noticed that at the end of the day, these seemingly suboptimal processes have a use, insofar as they lead to the employment of people. There will need to be reskilling of talent to take advantage of new opportunities as old jobs go away. In the same vein, strong political will will be needed to get this over the line, as changes such as embracing new technology that impacts people's livelihoods are politically sensitive.

In conclusion, the future of trade and logistics in Africa is brimming with potential. As a digital distribution platform dedicated to serving medium and low-income rural and urban communities, we are at the forefront of this transformation. AfCFTA represents a golden opportunity for us to uplift these communities and empower them with greater access to goods and services. By investing in infrastructure, harmonizing regulations, embracing technology, and fostering partnerships, we can collectively ensure that Africa moves forward, not only in goods but in prosperity, opportunity, and progress.