Africa Rising: Trade can fuel the continent's future

Africa Rising: Trade can fuel the continent's future

Sultan Ahmed bin Sulayem, Group Chairman & Chief Executive Officer | Sultan Ahmed bin Sulayem - Group Chairman & Chief Executive Officer

Resilience. It's the watchword for navigating the current dynamic and complex global supply chain landscape, particularly in Africa, a continent bursting with potential yet facing inherent challenges. In today's ever-shifting economic and geopolitical climate, where trade barriers rise and fall, adaptability and robustness are paramount.

Africa stands at a crucial moment. Youth, rich in resources and burgeoning markets. Yet, unlocking this potential requires us all to embrace trade as a transformative force, a catalyst for shared prosperity.

DP World, a long-time friend and partner to Africa, recognises this power. We believe in its ambitions and its people. With more than 27,000 staff across 48 markets, we are committed to supporting the region's economic growth and diversification. But trade, not aid, is the key.

Today, Africa accounts for a mere 3% of global trade. This statistic, a stark reminder of its underutilised potential, speaks volumes. We must break free from the shackles of commodity dependence and foster diverse, resilient economies. Our latest "Trade in Transition" report paints a promising picture for 2024. Business leaders anticipating significant growth in intra-African trade, with nearly 30% predicting Africa will be their third-largest market after Europe and North America.

Yet, this vision cannot rest solely on trade agreements, like the transformative Africa Continental Free Trade Area (AfCFTA). To truly realise Africa's potential, we must unite through genuine public-private partnerships. Trade thrives on strong logistics infrastructure, and Africa deserves no less. Poor roads, ports, and rail networks add a staggering 30-40% to intra-African trade costs, stifling growth and hinders progress.

These challenges are multifaceted. While physical upgrades to roads and ports are essential, equally important are investments in soft infrastructure like customs modernisation, trade facilitation agreements, and logistics skills training. Addressing bureaucratic bottlenecks and fostering regional cooperation alongside physical infrastructure improvements is crucial for building resilient and efficient trade networks.While intra-African trade is poised to flourish, with projections of nearly 4% growth in just the coming years, regional supply chain pressures persist, casting long shadows: inefficient infrastructure, exorbitant logistics costs, and the ever-present spectre of political instability. Climate change looms large too. These headwinds make building a resilient and sustainable African supply chain imperative. 

Technology offers powerful tools to optimise supply chains, improve efficiency, and overcome historical infrastructure hurdles. But the impact of trade on the environment cannot be ignored either. We must prioritise green logistics solutions, such as renewable energy for ports and electric vehicles, to ensure sustainable trade growth that does not compromise environmental goals. But no single entity can scale this mountain alone. A collective effort, driven by a shared vision for African trade, is paramount. This requires collaboration between tech companies, policymakers, and environmental organizations to develop and implement responsible practices.

With operations across the continent – from ports, freezones, cold storage, freight forwarding, market access, warehousing and logistics - DP World is leading by example. Last year, we added Tanzania’s Dar es Salaam to our growing family of ports and terminals across the continent, joining Mozambique and Dakar among others. We also launched the first phase of the Berbera Economic Zone in Somaliland. Together with Berbera Port and the Berbera Economic Corridor, we are developing a truly world-class integrated logistics and marine hub. Not only will it unlock Somaliland’s enormous potential, generating more than a quarter of its GDP by 2035, but it will serve the wider Horn of Africa, a region of more than 150 million people. 

Partnerships are key. Many African businesses struggling to secure the funds required to move cargo.  So, we connected with Standard Bank, one of the largest banks in Africa, to support African businesses of all sizes for their working capital needs. Together, we offer African businesses a single window to access trade finance solutions from global financiers who may otherwise be out of their reach. Furthermore, it paves the way for greater investment flow by mitigating risks for businesses looking to connect with global trade routes.

Progress has been made, but the journey is far from over. I urge everyone to consider how the private sector can leverage its resources and expertise to empower Africa. The AfCFTA's private sector action plan deserves our full support and active participation. Together, we can provide not just capital, but the knowledge and understanding of export challenges and regional trade barriers that hinder Africa's progress.

Africa is not just a market; it's a future waiting to unfold. The AfCFTA is not just a trade agreement; it's the economic and social cornerstone of the continent. Let us join hands, embrace trade as our weapon of choice, and unlock the incredible potential that lies within Africa. Together, we can build a future of shared prosperity, resilience, and progress.

This piece originally appeared in the Wall Street Journal.