SA climbs trade efficiency rankings

18 May 2012

South Africa outperformed the rest of Africa, as well as its upper middle-income economy peers, in a World Bank survey of trade efficiency, improving its previous performance despite a general slowdown in trade logistics performance in the wake of the global recession.

According to the World Bank’s “Connecting to Compete 2012” report, released on Tuesday, countries that pursued aggressive reforms continued to improve their trade logistics performance, despite the global slowdown in progress over the last two years.

South Africa was among a group of countries – including Chile, China, India, Morocco, Turkey and the US – that improved their previous performance, according to the study, which is based on a comprehensive world survey of international freight forwarders and express carriers.

Top performer in Africa, BRICS

In the upper-middle income country category, South Africa was the top performer, followed by China and Turkey. South Africa’s logistics performance indicators gave the country a score of 3.67, lifting it up to 23rd place overall out of 155 economies surveyed – up from a ranking of 28 in 2010.

China, ranked 26th, followed closest among South Africa’s BRICS partners, followed by Brazil at 45th, India at 46th, and Russia at 95th.

Tunisia was the next best African performer, ranked 41st, followed by Morocco (50th), Egypt (57th), Benin (67th) and Botswana (68th). Economic powerhouse Nigeria placed 121st.

“Infrastructure stands out as the chief driver of progress in top performers, followed by improvements in logistics services, and customs and border management,” Mona Haddad, sector manager of the World Bank’s international trade department, said in a statement.

“All top performers show strong cooperation between the public and private sectors, and a comprehensive approach in the development of services, infrastructure and efficient logistics.”

Role in reducing food prices, carbon footprint

At a time where food prices are at historic highs, the survey found that logistics is important for food security.

“Transport and logistics directly affect the price and local availability of food through the performance and resilience of food chains, especially in African and Middle Eastern countries that depend heavily on food imports,” the World Bank said.

In developing countries, particularly landlocked and poor ones, transport and logistics account for 20-60 percent of delivered food prices, according to the survey. “For instance, they make up 48 percent of the cost of US corn imported by Nicaragua.”

The survey, which for the first time included environmental indicators, also found that green logistics is quickly gaining prominence in high-income and emerging economies – “a positive development, since logistics and freight-related activities may account for up to 15 percent of human carbon dioxide emissions”.

“Trade logistics is key to economic competitiveness, growth, and poverty reduction,” said Otaviano Canuto, World Bank vice-president for poverty reduction and economic management.

“Unfortunately, the logistics gap between rich and poor countries continues, and the convergence trend experienced between 2007 and 2010 has stalled as events like the global recession and the European debt crisis shifted attention away from logistics reform.”

According to the World Bank, the way forward is clearly demonstrated by the top performers in the 2012 survey: “Only by fostering cooperation between the public and private sectors, and by considering the impact of all agencies on the supply chain, can a country create sustainable improvements in its logistical capabilities.”

SAinfo reporter