Emerging markets growth prospects look brighter than they have in years as small and medium-sized companies are the most likely to benefit from fresh acceleration of those economies, according to the 2018 Agility Emerging Markets Logistics Index.
In Africa, Egypt leaped from 20th position to 14th position making the biggest gain in the overall rankings, while in the separate category ranking countries’ business conditions or Market Compatibility, Egypt speeds up 26 places to No. 21.
CEO of Agility Global Integrated Logistics, Essa Al-Saleh in an emailed report noted that “Egypt took painful steps to revive its economy by devaluing its currency and cutting subsidies. Those moves appear to be paying off.”
Africa’s two largest economies lost ground in the 2018 index as other African countries remained steady. Nigeria fell from No. 24 to No. 31 while South Africa slipped from No. 23 to No. 26, making it the biggest decline of any market.
“Nigeria could be on the brink of a similar turnaround, especially if it can deal with corruption and oil prices stabilize. South Africa needs political stability so it can start growing again and address labor unrest and the high youth unemployment rate” Essa Al-Saleh said.
Other African countries that made the list include Morocco at 21 position, Algeria-30, Ethiopia-36, Ghana-38, Tanzania-39, Uganda-41, Tunisia-42, Kenya-43, Libya-44, Mozambique-49, and Angola-50.
East Africa is said to be positioned to attract investment and emerge as a low-cost manufacturing center, while cheap labor is losing its attraction as a driver of emerging markets growth in the eyes of logistics professionals who rate economic growth, foreign investment, trade volumes, location and transport infrastructure as more important.
Meanwhile, Sub-Saharan Africa’s infrastructural links between economic centers and poor connectivity are deepening concerns for the logistics industry. Poor infrastructure is seen as the region’s leading supply chain risk.
The Index that ranks countries by factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors, rank South Africa, Nigeria, Kenya, Ghana and Ethiopia as leading choices for most promising logistics markets within Africa.
South Africa, Nigeria, Egypt and Kenya among the emerging markets were highlighted to have the most logistics potential as they are among the Agility executives 20 top choices for most promising logistics market; however China and India remain by far the most popular choices.
With China and India at the top of the ranking, the survey agreed with the International Monetary Fund’s 2018 emerging markets forecast of 4.8%-4.9% GDP growth, marking the fastest expansion for emerging markets since 2013; a second consecutive year of higher growth for developing economies that have slowed dramatically since a 7.4% GDP gain in 2010.