Breaking barriers: How African SMEs can thrive amid logistics hurdles

Africa’s small and medium-sized enterprises (SMEs) are poised to be the backbone of the continent’s economic future.

As engines of job creation and innovation, these businesses have the potential to drive significant trade; however, many are stalling due to persistent logistics challenges.

Nelson Teixeira, managing director of Operations for sub-Saharan Africa at FedEx, underscores the pressing need for enhanced infrastructure, technology, and reduced bureaucracy to elevate Africa’s logistics to a global standard.

“Many SMEs striving to reach regional or international markets see every shipment as a potential challenge,” says Teixeira.

“Missed deadlines mean lost sales, extra costs pile up. Customers, and the economy in general, get frustrated.”

As SMEs attempt to navigate the ever-evolving demands of their customers, there is an urgent call for modernising logistics operations—an effort that requires cooperation from both government and industry players.

The latest World Bank report sheds light on the grim reality of transportation inefficiencies in Africa, revealing that around 37% of locally produced food is lost in transit due to slow processing times and inadequate infrastructure.

While initiatives like the African Continental Free Trade Area (AfCFTA) aim to lessen trade barriers, many small businesses find themselves excluded from valuable market opportunities unless logistics systems improve significantly.

Hope lies in the innovative digital tools emerging to provide solutions for these SMEs.

“Real-time tracking lets businesses know exactly where shipments are,” Teixeira explains. With the advent of online customs platforms, the arduous process of customs clearance has become faster and less error-prone, while flexible delivery options afford SMEs greater control over their operations. “Now you get less uncertainty, faster trade, and endless opportunities for small businesses,” he adds.

Furthermore, affordable and reliable delivery networks are transforming the landscape. SMEs that previously struggled to access regional or global markets can now expand their reach without the inflated delivery costs that once hindered their growth.

These advancements not only level the playing field against larger firms but also enhance service quality and speed of deliveries.

Nevertheless, the challenges faced by African SMEs are far from homogeneous. Landlocked nations grapple with longer transit times and increased costs, while sectors dependent on perishable goods and e-commerce contend with unique logistical pressures.

Addressing these sector-specific issues necessitates tailored approaches—flexible delivery networks and targeted digital solutions are essential.

In South Africa, the government has committed to modernising vital logistics infrastructure through the National Freight Logistics and Roadmap.

This ambitious plan aims to translate policy commitments into actions that will open avenues for private sector investment and reinforce the overall logistics framework essential for SME growth.

The efficacy of logistics is indisputable; they form the lifeblood of small and medium-sized enterprises.

Collaborative efforts between public and private sectors are imperative to tackle these critical infrastructure barriers.

Reliable logistics providers can empower SMEs to expedite goods movement and navigate complex trade processes with ease.

The takeaway is clear: while the current logistics landscape presents challenges, it does not have to serve as a barrier.

With the right logistics partner, smarter supply chain practices, and a government eager to implement actionable reform, African SMEs can spearhead the continent’s next wave of economic growth.

BUSINESS REPORT