AFRICA

Africa is the world's second-largest and second most-populous continent, after Asia. At about 30.2 million km (11.7 million sq mi) including adjacent islands, it covers 6% of the Earth's total surface area and 20.4% of the total land area. With 1.0 billion people (as of 2009, see table) in 61 territories, it accounts for about 14.72% of the world's human population. The continent is surrounded by the Mediterranean Sea to the north, both the Suez Canal and the Red Sea along the Sinai Peninsula to the northeast, the Indian Ocean to the southeast, and the Atlantic Ocean to the west. The continent has 54 sovereign states, including Madagascar and various island groups. Africa, particularly central Eastern Africa, is widely regarded within the scientific community to be the origin of humans and the Hominidae clade (great apes), as evidenced by the discovery of the earliest hominids and their ancestors, as well as later ones that have been dated to around seven million years ago including Sahelanthropus tchadensis, Australopithecus africanus, A. afarensis, Homo erectus, H. habilis and H. ergaster with the earliest Homo sapiens (modern human) found in Ethiopia being dated to circa 200,000 years ago. Although it has abundant natural resources, Africa remains the world's poorest and most underdeveloped continent, the result of a variety of causes that may include the spread of deadly diseases and viruses (notably HIV/AIDS and malaria), corrupt governments that have often committed serious human rights violations, failed central planning, high levels of illiteracy, lack of access to foreign capital, and frequent tribal and military conflict (ranging from guerrilla warfare to genocide). According to the United Nations' Human Development Report in 2003, the bottom 25 ranked nations (151st to 175th) were all African. Poverty, illiteracy, malnutrition and inadequate water supply and sanitation, as well as poor health, affect a large proportion of the people who reside in the African continent. In August 2008, the World Bank announced revised global poverty estimates based on a new international poverty line of $1.25 per day (versus the previous measure of $1.00). 80.5% of the Sub-Saharan Africa population was living on less than $2.50 (PPP) a day in 2005, compared with 85.7% for India

WEST AFRICAS PERFORMANCE

West Africas overall performance lagged behind most regions as measured by the International LPI, only surpassing Sub-Saharan countries. In general, West Africa fared in line with its per capita income, performing only marginally better than the Low income country group.

In terms of individual countries, Senegal and Benin are the best performers within the region ranked 58th and 69th out of 155 countries-, while Guinea-Bissau (149th) and Sierra Leone (153rd) are last in the overall LPI ranking.

These results also suggest that Western African countries can be classified in three categories according to their logistics environment. The conclusion of the Connecting to Compete report suggests that countries should be classified in four broad groups: High performers, consistent and partial performers, and logistically constrained economies. Senegal is the only consistent performer in this group -Senegal engaged early in facilitating measures and investment (e.g. Gainde)- followed by nine partial performers, leaded by Benin. Finally, Liberia, Mali, Burkina Faso, Guinea-Bissau and Sierra Leone are logistics constrained countries. LOGISTICS BOTTLENECKS The Domestic LPI provides additional information useful to identify logistics bottlenecks, using qualitative (respondents assessments about the logistics environment in the country they are based in) and quantitative information, such as time and cost to import and export.

The measured time and cost indicators for Western Africa represent a clear indication of the logistics challenges that trade operators face in this region. Compared to other regions, average lead times for imports in West Africa are the largest in the developing World. Also, import costs for West African countries are noticeably higher than in the rest of the regions (up to 40% more) mainly due to lack of port reform and multiple interventions by public organization (shippers councils, etc) that add to the cost. However, recent evidence indicates that predictability can be even more important than time and cost for logistics performance. In this regard, 73% of the logistics operators report that timely deliveries are infrequent or rare. This percentage is the highest among all regions, including MENA (61%) and Sub-Saharan Africa (68%). The assessment of logistics professionals also matches the quantitative information gathered in the Domestic LPI. Exports (imports) delivery times in Western and Central Africa can be as much as 7 times (3 times) more unpredictable compared to the average developing country, measured by the standard deviation from the mean lead time. INFRASTRUCTURE IS NOT A MAJOR CONSTRAINT, BUT STILL NEEDED IN THE TRADE FACILITATION AGENDA According to the qualitative information collected from logistics professionals, trade supporting infrastructure does not result in a major constraint for Western African countries, in relation to other regions in the continent, or even the low income economies group. This region appears to outperform MENA and Sub-Saharan Africa most importantly in port, airport and road infrastructure. In contrast, rail infrastructure quality is remarkably low in comparison with the same group of countries. As seen, railroad quality of service is also lagging in West Africa, therefore calling for facilitation initiatives to further develop and promote the use of this transport mode.

SOUTHERN AND EAST AFRICAS PERFORMANCE

East Africas overall performance lagged behind all regions as measured by the International LPI, while Southern Africa is ranked second within the continent. While Southern African countries fared only marginally worse than the average Lower middle income country, Eastern African economies are positioned well below the low income countries mean LPI score.

In terms of individual countries, South Africa and Uganda are the best performers within these regions ranked 28th and 66th out of 155 countries-, while Eritrea (154th) and Somalia (155rd) are last in the overall LPI ranking.

Eastern and Southern Africa include countries with very different level of services development, investment in infrastructure, and implementation of facilitation initiatives. While South Africa has a logistics system comparable to Europe, the horn of Africa has been identified as the most problematic area worldwide. Several low income countries in the region, such as Uganda, have experienced positive trends like South Africa. However, several of the countries are landlocked or island states, which imply lower connectivity levels with the rest of the World. The conclusion of the Connecting to Compete report suggests that countries should be classified in three broad groups: High performers, consistent and partial performers, and logistically constrained economies. South Africa is the only High performer in this group, followed by seven partial performers, leaded by Uganda. Finally, Botswana, Mozambique, Zambia, Angola, Sudan, Rwanda, Namibia, Eritrea and Somalia are logistics constrained countries. While income remains an important determinant of a countrys logistics environment, it does not account for all variations across performance levels. Since many of the countries are relatively small economies with higher confidence intervals, the rankings upper and lower bounds tend to be wider than in other parts of the World. Therefore, the exact position in the ranking between South Africa and Somalia has some degree of uncertainty.

LOGISTICS BOTTLENECKS The Domestic LPI provides additional information useful to identify logistics bottlenecks, using qualitative (respondents assessments about the logistics environment in the country they are based in) and quantitative information, such as time and cost to import and export. The measured time and cost indicators for East Africa represent a clear indication of the logistics challenges that trade operators face in this region. Average lead times for exports in East Africa are the largest in the developing World, while imports times are the second largest.

Source: LPI 2010; Note: Lead time is the transport time (in days) for export and imports from the point of origin to the port of loading, or equivalent or to the buyers warehouse. Costs are the dollar amount paid for a 40 dry container or a semi-trailer. Also, import costs for Southern African countries are the second highest among developing economies (up to 40% more than in other regions), and only surpassed by Western Africa. However, recent evidence indicates that predictability can be even more important than time and other costs for logistics performance. In this regard, almost 30% of the logistics operators based in East Africa report that timely deliveries of imports are infrequent or rare. This percentage is the highest among all regions, including Western (5%), Southern (7%) and Northern Africa (19%). The assessment of logistics professionals also matches the quantitative information gathered in the Domestic LPI. Exports delivery in East and Southern Africa can be as much as 2 times more unpredictable compared to the average developing country, measured by the standard deviation from the mean lead time.

THE CHALLENGE OF LOGISTICS IN TRADE CORRIDORS AND LANDLOCKED COUNTRIES Trade corridors are the arteries carrying trade within regions. They are directly relevant for landlocked countries, which depend on them for their exports and imports to World markets. Given that there are five Least Developed Landlocked countries (LLDCs), the performance of corridors is essential to trade and growth in East and Southern Africa. This performance depends on a series of factors such as the quality of the system supporting trade on corridors, infrastructure, availability and quality of logistics services (trucking), trade and transport procedures, and above all, the transit regime

There are 5 landlocked economies in Eastern and Southern Africa measured by the LPI: Botswana, Ethiopia, Rwanda, Uganda and Zambia. In turn, these landlocked countries export and import goods through a grid of corridors running through neighboring transit countries. The most relevant corridors are:

East Africa Addis Ababa (Ethiopia) Djibouti Northern Corridor: Kigali (Rwanda) Mombasa (Kenya), through Kampala (Uganda)

Central Corridor: Bujumbura (Burundi) Dar es Salaam (Tanzania) Southern Africa Gaborone (Botswana) Durban (South Africa) Gaborone (Botswana) Walvis Bay (Namibia) Maseru (Lesotho) Durban (South Africa) Mbabane (Swaziland) Maputo (Mozambique) Blantyre (Malawi) Beira (Mozambique) Lusaka (Zambia) Beira (Mozambique), through Zimbabwe Lusaka (Zambia) Dar es Salaam (Tanzania) Lusaka (Zambia) Durban (South Africa), through Zimbabwe Blantyre (Malawi) Durban (South Africa), through Mozambique and Zimbabwe Chipoka (Zambia) - Lilongwe (Malawi) Nacala (Mozambique)

In practice, landlocked countries inherently suffer from economic and time penalties compared to coastal countries. In terms of export and import costs, Southern African countries without access to sea ports face surcharges of 90%-180% vis--vis its coastal neighbors. In addition, clearance times in Eastern Africas landlocked countries are almost 5 times higher compared to those with port access in the same region. Apart from unreliability costs, transporters on trade corridors operate under regulatory systems that can negatively affect productivity and impose an additional burden on landlocked countries. While transport costs are not very different from levels

found in other countries, prices charged on some corridors can be significantly higher. For instance, between 60%-75% of all logistics operators based in East Africa assess that port, airport and road transport rates are high or very high, whereas this percentage adds up to only 45% in the rest of the developing World.