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. That’s according to the latest findings of the 2022 Agility Emerging Markets Logistics Index, a ranking of the world’s 50 leading emerging markets.
Kenya was ranked No. 28 in the overall Index, 17th in digital readiness globally, which means it is leading the sub-Sahara Africa. South Africa, ranks No. 24 overall but is 21st in digital readiness while 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.
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“The connection between a country’s digital capabilities and growth prospects is undeniable. 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,” Agility CEO, Tarek Sultan, said
Digital readiness assesses digital skills, training, Internet access, e-commerce growth, investment climate, and ability to nurture startups, as well as sustainability factors such as renewable energy mix, lower emissions intensity, and green initiatives. The importance of digital readiness was apparent in the survey. Logistics executives identified the adoption of technology as the leading driver of economic and business growth for emerging markets. The top focus areas for their companies are 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 a 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,” Sultan said. “If emerging markets can get better access to vaccines and give small business a boost, they can help power abroad, dynamic global recovery.”
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On his side, John Manners-Bell, Chief Executive of Transport Intelligence (Ti), a leading analysis and research firm for the logistics industry that compiled the Index, said the rate at which emerging markets can 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.
“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. Digitization will play an important role in facilitating frictionless cross-border movements, but in the long run, the benefits of globalization will only be shared with emerging markets if supply chains and logistics can be made more resilient in the face of future crises,” said John Manners-Bell.