Sultan Ahmen Bin Sulayem
Group Chairman and CEO, DP World
Rich in resources and cultures, Africa has the potential for a bright future, which can be brought much closer by harnessing the power and flow of trade.
One of Africa’s biggest challenges is its lack of infrastructure to bring its products to market, a fundamental barrier which has stunted the continent’s development.
Opening the market
Some key building blocks are already in place to unlock trade in the region, giving more people a chance to make sustainable livings by opening new markets for their produce. States are cooperating more closely than ever before.
In January last year, the African Continental Free Trade Area (AfCTA) came into force, promising to increase intra-African trade through deeper liberalisation and regulatory coordination. It aims to improve the competitiveness of African industries and enterprises through market access, exploiting economies of scale and more effective resource allocation.
A growing economy
Without a genuinely pan-continental market, Africa will remain a minor player in global trade. Today, it accounts for just 2.4% of total global exports and is even a relatively small player in its own region.
The free trade area could transform the continent’s economy — with a current combined GDP of USD 3.4 trillion — and its relationship with the rest of the world. The Brookings Institute estimates the African economy could nearly double in size to USD 6.7 trillion by 2030 and reach a staggering USD 16.12 trillion by 2050.
If the AfCFTA succeeds in its ambitions, it will create a unique opportunity for people and businesses. As momentum behind the agreement builds, success will depend on smart choices and thoughtful policy options to uncover end-to-end supply chain potential across the continent.
By 2025, Africa’s e-commerce revenue will be double its 2020 level.
Digital logistics for Africa
Across Africa, companies are exploring how new technology and better farming techniques can boost yields, connect smallholders with markets and process food to add value. Achieving these outcomes is of growing importance, too, as food prices rise and anxiety over food security increases.
Long-term investments and building strategic partnerships will reduce the cost and time of trade while developing and managing infrastructure that grows local economies will enable intra-African trade. This will position Africa to become a trade powerhouse.
This must include investing in technology to open up new markets.
New e-commerce skills
According to the UN Food and Agriculture Organization, farmers across sub-Saharan Africa have been benefiting from digital technologies, usually via phone and messaging systems such as SMS. By 2025, Africa’s e-commerce revenue will be double its 2020 level. Millions more will take their livelihoods online in the next few years. Equipping people with skills for this new era — and delivering connections through technology and trade — will be vital to encouraging growth so that Africa can reap the rewards of its booming population.
Tapping into this, last year, DP World launched dubuy.com — Africa’s new online marketplace. It connects small traders in Ghana, Kenya, Tanzania and Zambia to markets all over the globe. Customers in other developing markets are just a few clicks away for the first time.
Discovering trade flows
Uniquely, the new digital trading corridors are underpinned by the physical corridors the company has built across the African continent. This includes ports, terminals and logistics operations, such as the port at Maputo and its connections with East and southern Africa.
As these connections expand, imagine what new, untapped trade flows will be unveiled. On the west coast, port-centric logistics solutions are offered through Senegal and Angola. On the east coast, DP World is developing an economic zone close to Berbera Port in Somaliland.
These developments show that it is only a matter of time until Africa is considered a global economic leader.