Africa to see bump in exports as China loses popularity

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by Emily Atkins

Global logistics executives, still worried about recession, say they are battling higher costs, reducing dependence on sourcing from China, and planning to boost investment in Africa despite seeing emerging markets investment overall as somewhat riskier.

Half of the 830 industry professionals surveyed by Ti Insight for the 2024 Agility Emerging Markets Logistics Index expect a global recession in the coming year – down from nearly 70 percent a year ago.

More than 63 percent of respondents say their companies continue overhauling supply chains by spreading production to multiple locations or relocating it to home markets and nearby countries. China, the world’s leading producer, stands to be most affected: 37.4 percent of industry professionals say they plan to move production/sourcing out of China or reduce investment there.

“Supply chain managers are still coming to terms with the political and economic instability characterizing the post-COVID global economy,” said John Manners-Bell, chief executive of Ti Insight. “Geopolitical relationships are changing rapidly, and this is having a major impact on international trade and risk profiles. ”

The survey and Index are Agility & Ti Insight’s 15th annual snapshot of industry sentiment and ranking of the world’s 50 leading emerging markets. The Index ranks countries for overall competitiveness based on their logistics strengths, business climates and digital readiness — factors that make them attractive to logistics providers, freight forwarders, air and ocean carriers, distributors and investors.

Shipping and logistics costs that soared during the COVID pandemic and its aftermath are still climbing but at a slower rate, the survey found. One way shippers expect to cope is by increasing use of digital freight forwarding from 37.8 percent today to 52 percent in five years.

Meanwhile, the industry is gearing up for a surge in Africa investment. Nearly 62 percent of professionals say their companies are planning additional or first-time investments in Africa vs. only about seven percent exiting or scaling back there.

China and India, the world’s two largest countries, held their spots at No. 1 and 2 in the overall rankings. UAE, Malaysia, Indonesia, Saudi Arabia, Vietnam, Qatar, Thailand and Mexico rounded out the top 10. No. 24 South Africa and 25 Kenya were highest among countries in Sub-Saharan Africa.

Three of the four countries offering the best emerging markets business conditions are situated in the Arabian Gulf: UAE (1), Saudi Arabia (3) and Qatar (4). Malaysia (2) and Jordan (5) both moved up in the business fundamentals rankings.

China and India were tops for domestic and international logistics. In digital readiness, China jumped three spots to No. 1, followed by UAE, Malaysia and Qatar. India fell from the top spot a year ago to No. 5 this year.

Outside of the top 10, many of the biggest swings in year-to-year rankings involved countries experiencing conflict, facing international economic sanctions, or suffering from chronic economic instability. Among them: Ukraine, Russia, Iran, Ethiopia, Argentina, Lebanon, Tunisia.

“Shippers and carriers are struggling to minimize supply chain risk and find new growth opportunities. Inflation and recession risks have eased, but the industry is still living with the aftershocks of the COVID pandemic. At the same time, businesses are worried about geopolitics — troubled trade relations between China and the U.S. and Europe, and the thicket of sanctions against a growing number of countries,” said Agility vice chairman Tarek Sultan.