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Logistics Challenges Facing eCommerce in Africa

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By Josephine Wawira ,

According to Euromonitor, the world’s fastest-growing economies by 2030 will be in Africa. This consequently makes the continent the next big e-commerce market. And as this positive narrative continues to place Africa as a top investment destination, the need for advanced logistics systems has become inevitable. The growth of e-commerce will significantly depend on the quality and efficiency of logistics networks; from intra and cross trade to financial transactions in payment of goods and services.

When writing the African e-commerce story, I often leap at the chance to explore only the enviable milestones the continent has made. Nevertheless, there still exist formidable challenges especially in logistics, a vital constituent of the industry. The African Development Bank, in its 2019 African Economic Outlook, notes that “trade costs due to poorly functioning logistics markets may be a greater barrier to trade than tariffs and nontariff barriers”. This side of the story must also be told; if we are to find sustainable solutions to what could be the gateway to growing Africa’s e-commerce by leaps and bounds.

Unsatisfactory National Address Systems and Transport Infrastructure

One of the biggest logistics’ hurdles holding back the industry is the lack of proper national address systems in most African countries. This, coupled by poor road networks, make it even harder to conveniently deliver products to customers. Consequently, companies have had to rely on fairly descriptive addresses and landmarks provided by the customers during the initial stages of the online purchase process. The delivery persons are also required to keep in constant contact with clients when delivering products, to receive further directions while en-route.

While generally Africa’s infrastructure lags behind that of its counterparts including America and Europe, it is worthy of note that each country has its own value proposition. In 2018, the World Bank’s Logistics Performance Index placed South Africa, Kenya, Rwanda, and Côte d’Ivoire as the top 4 best-performing countries in Africa, while Somalia, Sierra Leone, Eritrea and Zimbabwe were at the bottom 4.

In most African countries, the result of the poor road infrastructure is heavy traffic jams that lead to delayed deliveries, cancelled orders for the on-demand services and subsequently loss of revenue. Alternative modes of transport have therefore come into play in some markets like Kenya and Nigeria, with the use of easy to navigate motorcycles, popularly known as Bodabodas. With about 1.2 million motorcycles in the passenger transport business, Kenyan ecommerce companies have strived to tap into this market by using Bodabodas to swiftly deliver products, especially within busy cities.

There are huge opportunities for logistics to grow e-commerce, but few established players exist in the market,” notes Apoorva Kumar, Jumia’s SVP of Logistics. Present in 14 African countries, Jumia is one of the ecommerce players building logistics and fulfilment infrastructures to ease delivery of products to consumers using both vehicles and bodabodas.

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                                                                                 Jumia’s Bodaboda Rider

Providentially, technology has been a boon to the logistics industry. In Nigeria and Kenya, Jumia is running a well-established system using Machine Learning, relying on GPS enabled delivery apps. The coordinates collected in the first delivery are then registered and used in making a logistics network for future conveyance.

In Rwanda, companies like Zipline are leading the way in commercial drone deliveries. While initially focused on delivering blood to remote health centres that are otherwise difficult to reach fast due to Rwanda’s hilly terrain; it is expected that Zipline’s drones will in future be used in other sectors including e-commerce. Back in Kenya, Astral Aerial Solutions is using drones for among other services, last mile deliveries. The company aims to, in its words, “open up Kenya’s hard to reach regions to new and exciting business opportunities”.

The possibilities for a better future in logistics, in my view, are endless! And as Apoorva reiterates, companies cannot solely build a successful logistics system. “It requires integrating various systems and partners to create a big enough network to serve the growing needs of the e-commerce consumers,” he says, calling for both private and public partnerships to this endeavour.

What Then, Does the Future Hold?

Data by logistics consulting firm Knight Frank shows that the cost of transportation represents 50% to 75% of the retail price of the goods. This alone underpins the demand for long-term strategies to the logistics challenges in Africa.

From delayed deliveries between local destinations to sluggish growth of cross-border trade, the effects are being felt across the board. Modern online retailing is headed towards pre-orders, requiring mature infrastructure for both small and medium businesses. This will help meet the packaging, storage, distribution, freight and last-mile-delivery requirements. Though challenging, Africa is a land full of commercial opportunities; causing a scramble for a piece of the pie among international investors.

Therefore, for e-commerce companies in Africa to achieve sustainable bottom-line growth, there needs to occur more tech-empowered handshakes between multiple service providers across markets. Governments have the responsibility to create one-window-policies that empower digital payment solutions as well as logistics infrastructure including road networks, air cargo handling systems and warehouses among others. Similarly, e-commerce and logistics powerhouses like Jumia should commit to empowering more upcoming entrepreneurs. They must also use their leading positions to continue paving the way for economic integration in Africa.

Josephine Wawira is a Consultant in Communications and Public Relations, and a writer with a focus on African Development. She has written opinion articles covering among other topics e-commerce, travel, hospitality and tourism and is currently the Group PR & Communications Assistant Manager at Jumia Group.


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

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Wema Bank Launches Second FGN-ALAT Digital ‘Skillnovation’ Cohort

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Wema Bank has launched the second cohort for the FGN-ALAT Digital Skillnovation Programme in partnership with the Federal Government to train and equip two million young people and 1 million MSMEs across Nigeria with relevant digital skills.

Since the launch of the first cohort in 2023, over 300,000 youths and business owners have leveraged the platform as a launchpad for their business and career success.

This cohort featured 100% virtual learning sessions through which participants from the 36 states in Nigeria and the Federal Capital Territory (FCT) were provided with self-paced online learning experiences.

As cohort 2 begins in the second quarter of 2024, the FGN-ALAT digital programme is officially transitioning to physical training sessions and the curriculum will cover key digital skills including software engineering, product management, business analysis, cloud computing and product design, among others.

This phase of the programme will be executed via FGN-ALAT digital hubs, which will be set up in the different states across the six geopolitical zones in Nigeria to ensure that every Nigerian can access the programme’s full benefits regardless of their location.

These hubs will be equipped with training and incubation facilities ideal for digital-driven learning, giving participants the opportunity to acquire marketable and transferrable digital skills and gain a competitive edge in the global digital ecosystem.

The FGN-ALAT digital hubs will be set up in phases and trainings will commence accordingly, starting with Borno  and Anambra State.

Wema Bank’s Executive Director of Retail and Digital Business, Tunde Mabawonku, emphasised the pivotal role of the programme in bridging the gaps in Nigeria’s macroeconomic landscape towards national development.

“We are unwavering in our commitment to supporting MSMEs and with the FGN-ALAT Digital Skillnovation Programme, it’s all about the bigger picture—which is why we have partnered with the Federal Government to augment the scale of this programme’s impact.

“By tailoring this programme to suit the needs of both entrepreneurial minded and professionally inclined Nigerians, we are not just arming SMEs for more efficient business management and growth, we are also equipping Nigeria’s workforce for increased productivity and the ripple effect will not only create more viable employment opportunities for Nigerians towards reduced unemployment and underemployment rates, but further drive economic growth and national development, boosting Nigeria’s position on the global playing field.

“The digital evolution is moving sporadically and by empowering our youth and MSMEs with in-demand digital skills, we are ensuring that Nigeria is not left behind as the world evolves.

“Beyond the intellectual resources and other non-monetary opportunities, we are going a step further to provide financial support for these participants in form of millions of naira in equity capital, soft loans and grants, to enable them put their learnings to practice and build sustainable streams of income that could help them become employers in their own right.

“I encourage you to take the big step forward in achieving your business and career goals by joining the programme. All you have to do is visit the website to register. This programme is completely free and there’s more than enough room for you. Your success is Nigeria’s success and as your unique journey unravels, our promise remains certain,” he said.

Referring to the programme as an eye-opener for all, Mariam Isah, a beneficiary of Cohort 1, said, “It’s almost unbelievable all I’ve learnt in one month virtual training.

“I started this training simply looking for a way forward for my business but I have unlocked secrets that are life changing not just in my business but in all aspects of life. I am so grateful for this rare opportunity, and I can’t wait to be a part of the cohort 2.”


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StarNews, Global Black Economic Forum Launch Business Competition In Partnership with MTN & USAID

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Africa’s leading video streaming platform, StarNews Mobile and the Global Black Economic Forum (GBEF), have announced a call for applications for the launch of their Business Competition in Lagos, Nigeria.

Held in partnership with MTN and United Nations Agency for International Development (USAID), the initiative will empower Nigeria’s most promising businesses that are classified as Small-Medium Enterprises (SMEs) with invaluable investment and partnership opportunities from the USA.

Held over 10 weeks between April 8th to June 14th, hosted exclusively on the StarNews Biz Channel on the StarNews platform, this competition offers a platform for emerging entrepreneurs to showcase their ventures and gain national visibility.

With subscribers voting for their favourite candidates, the top 20 contestants will seize the spotlight and make their mark on the business landscape.

The StarNews Business Competition in partnership with GBEF delivers a unique opportunity for thriving Nigerian SMEs to access mentoring, funding, partnerships and socio-economic development tools through the Global Black Economic Forum.

With the prospect of securing cash prizes through StarNews worth up to NGN5,000,000, getting access to StarNews’s network of investors and the opportunity to gain national visibility by having their business on the StarNews web platform.

The top three winners will also receive coaching from GBEF’s Academy for Advancing Excellence and become part of GBEF’s ecosystem of global leaders committed to social and economic justice across the Black Diaspora.

Previous speakers at GBEF convenings from the entertainment sector include Wyclef Jean (Haitian Musician & Activist), Debra Lee (Former CEO of Black Entertainment Television – BET) and Ceci Kurzman (Founder of Nexus Management Group). Applications will close on April 5th 2024.

Speaking on the competition’s launch, Guy Kamgaing, Founder and CEO at StarNews Mobile, says “The StarNews Business Competition is a passion project close to our hearts at StarNews Mobile.

It’s about discovering the most promising business entrepreneurs and creators in Nigeria, opening up global opportunities for them and providing them with the resources and tools to achieve their goals.

By partnering with MTN, USAID and GBEF, we want to be a platform of empowerment for these SMEs by helping them give back to the communities that are supporting them.”

According to the US Embassy and Consulate for Nigeria, over 80% of Nigerian startups are incorporated in the United States and more than 60% of venture capital funding in Nigerian startups accounted for by the US.

In 2023 alone, Nigerian startups raised a total of $398mn however, this signalled a 66% funding decline compared to 2022 due to the global economic downturn, reinforcing the massive need for a fresh injection of capital and business support for Nigeria’s emerging SMEs.

Alphonso David, President and CEO of the Global Black Economic Forum notes that, “Our partnership with StarNews Mobile is a critical resource as we continue to build the collective strength of entrepreneurship across the Diaspora.

“Building a sustainable ecosystem of Black entrepreneurs in the United States and across the African continent is essential to create a future that makes economic opportunity and economic freedom a reality for all.”

A sister company to ESSENCE, GBEF advances its work by convening global summits and conferences, bringing together world leaders, business leaders, entrepreneurs, celebrities and civic leaders to address the most challenging problems facing our communities.

GBEF’s Academy for Advancing Excellence facilitates workforce and leadership development strategy, addressing the talent pipeline & employee lifecycle, providing leadership development & coaching, and conducting institutional assessments & research.

GBEF also develops and implements economic and social justice policy recommendations with partners ranging from civil and human rights organisations to government entities and corporations that advocate for economic opportunity, social justice, and health equity through thought leadership, advocacy and litigation.

Launched in 2017, StarNews Mobile empowers African content creators with the unique opportunity to monetize their work through a subscription model, boasting over 4 million subscribers and a thriving community of more than 120 content creators.

With a strong presence across six countries including Cameroon, Nigeria, Côte D’Ivoire, Congo, Benin and Ghana, the platform has also established key partnerships with major telecom operators such as MTN and Orange.

To-date, StarNews Mobile has secured over $8mn in funding with its most recent raise – a $3mn pre-Series A funding round in October 2023 – led by Janngo Capital with participation from French football players Aurélien Tchouaméni, Jules Koundé and Mike Maignan.

 


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Companies Invest More than $100,000 Yearly to Upskill their Cybersecurity Teams – Study Reveals

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Over 70% of businesses pay more than USD $100,000 for additional training annually to keep skills of their cybersecurity employees up to date, a recent global Kaspersky study has revealed.

However, the surveyed companies also highlighted that there was a lack of relevant courses covering new challenging spheres in the educational market and stated that training does not always bring them the expected result.

In its recent study ‘The portrait of the modern Information Security professional’, Kaspersky examined the topic of the global cybersecurity staff shortage, analysing the exact reasons businesses lack cybersecurity experts, and identifying the ways they evaluate and upskill their cybersecurity workforce¹.

According to the research, companies are investing significant amounts in upskilling their cybersecurity teams: 43% of organisations globally say they usually spend between $100,000 and $200,000 per year on information security courses, while 31% even invest over $200,000 for training programs. The remaining 26% state they usually pay less than $100,000 for educational initiatives².

However, cybersecurity practitioners also note that the educational market is struggling to keep up with the rapidly changing industry and fail to deliver the necessary training programs on time.

Survey results for the Middle East, Turkiye, Africa (META) region shows that the scarcity of courses covering new challenging spheres (48%) was the main problem for those searching for cybersecurity training.

50% of respondents from the META region also stated that trainees tend to forget what they learned because they had no opportunity to apply newly acquired knowledge, therefore the courses were useless to them.

The need for special training pre-requisites such as coding and advanced mathematics, which were not specified at the pre-registration stage were also problematic for 37% of practitioners from the META region.

“With a constantly evolving threat landscape, businesses should continually improve the skills of their cybersecurity personnel in order to be well prepared for sophisticated cyberattacks.

“Developing high-profile specialists within the company and building internal expertise can be an effective strategy for organisations that aim to retain existing employees and allow them to grow professionally, instead of constantly hunting for new candidates and checking their professional backgrounds and practical skills.

“For organisations served by Managed Service Providers it is also important to maintain a pretty high level of expertise internally and use the same language when discussing the scope of services and Service Level Agreement with them,” comments Veniamin Levtsov, VP, Center of Corporate Business Expertise at Kaspersky.


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