Read time: 3 minutes

African economies gaining ground in digital readiness

By , ITWeb
Africa , 08 Feb 2022

Leading African economies that have struggled to improve their infrastructure, business conditions and overall competitiveness are generally performing better against other emerging markets in areas that measure their digital skills and sustainability.

This is one of the key findings of the 2022 Agility Emerging Markets Logistics Index, a ranking of the world’s 50 leading emerging markets compiled by analysis and logistics industry research firm Transport Intelligence (Ti).

According to the research Kenya ranks No. 28 in the overall Index but is 17th in digital readiness. South Africa, No. 24 overall, is 21st in digital readiness. Likewise, Ghana is 32nd overall and 23rd in digital readiness.

The Index, now in its 13th year, ranks countries for overall competitiveness based on their logistics strengths, business climates and, for the first time, their digital readiness – all factors that make them attractive to logistics providers, freight forwarders, air and ocean carriers, distributors and investors. The Index includes a survey of 756 supply chain industry professionals.

Digital readiness assesses digital skills, training, Internet access, e-commerce growth, investment climate, and ability to nurture start-ups, as well as sustainability factors such as renewable energy mix, lower emissions intensity and green initiatives.

“The connection between a country’s digital capabilities and growth prospects is undeniable,” said Agility CEO Tarek Sultan. “The competitiveness of emerging markets countries will be determined by their ability to develop digitally skilled businesses and talent pools, and find the resolve to lower their emissions in ways that spur growth rather than sacrificing it.”

The importance of digital readiness was apparent in the survey. Logistics executives identified adoption of technology as the leading driver of economic and business growth for emerging markets. The top focus areas for their companies: technology and sustainability.

In addition to performing relatively well in digital readiness, Ghana improved its year-to-year rankings in international logistics infrastructure (to 37th from 45th); domestic logistics infrastructure (to 36th from 38th); and business fundamentals (to 28th from 32nd).

Most logistics industry executives see moderate-to-strong economic growth and little or no chance of recession in 2022, even without immediate relief from the snarled supply chains and sky-high ocean and air freight rates triggered by the COVID-19 pandemic.

Roughly two-thirds of the 756 industry professionals surveyed for the Index believe shippers will see cargo rates come down by the end of the year. Eighty-percent see port bottlenecks, air capacity shortages and trucking issues easing by year end.

“The industry’s optimism reflects the fact that emerging economies are getting more resilient and figuring out ways to weather supply chain disruption,” said Sultan. “If emerging markets can get better access to vaccines and give small business a boost, they can help power a broad, dynamic global recovery.”

Index rankings for Sub-Saharan Africa: South Africa (24), Kenya (28), Ghana (32), Nigeria (34), Tanzania (42), Uganda (43), Ethiopia (45), Mozambique (46), Angola (47).

In the Middle East and North Africa, rankings were: UAE (3), Saudi Arabia (6), Qatar (7), Turkey (10), Oman (14), Bahrain (15), Kuwait (17), Jordan (19), Morocco (20), Egypt (21), Iran (30), Lebanon (35), Tunisia (36), Algeria (37), Libya (50).

John Manners-Bell, Chief Executive of Ti, said: “How quickly emerging markets recover from the crisis of the last two years is heavily reliant on the speed of the vaccine rollout, not least from the perspective of social, economic and political cohesion. At the same time, the links connecting these economies with western markets need to be reinstated if shippers are to be integrated back into the global trading system. COVID has meant that shipping has become even more costly, complicated and slower, especially for small and medium-sized businesses. Digitisation will play an important role in facilitating frictionless cross-border movements, but in the long run the benefits of globalisation will only be shared with emerging markets if supply chains and logistics can be made more resilient in the face of future crises.”

Daily newsletter