Associations Between Logistics and Economic Growth in Africa

Abstract

Despite macro‐economic predictions of economic catch‐up and steady‐state economic growth for all countries, in the long run, the gap between advanced and developing African countries is widening. This study investigates the association between logistics and economic growth in 32 African countries from 2007 to 2018. The results show that five of the six logistics performance indicators, under review, have weak positive economic growth effects, ranging between 0.01 and 0.03. Relatively high economic growth effects emerge from the “competence and quality of logistics” indicator. This research highlights that the growth potential in African countries depends on improvements in logistics performance and that prioritising investments to improve logistics efficiency can improve long term growth and development in Africa. Practitioners and policymakers can use the results of this study to target and prioritise specific logistics indicators based on the magnitude of their impact on economic growth.

Renewable energy and advanced logistical infrastructure: Carbon‐free economic development

“…On the other hand, in any country, an ineffective tracking system creates difficulty for people to manage their consignments; hence, investors feel reluctant to visit and trade with those countries, which negatively affected growth in the country. The result of LPI2 is in line with the study of Chakamera and Pisa (2020), in which the researcher elaborated that ability to track and trace consignments is positively linked with economic growth; also, they discussed that effective tracking and tracing ability reduce the additional cost and waiting time. The researchers also addressed that improvement in LPIs complemented the country's economic growth (Suki et al, 2021).…”

“…The result of LPI1 is similar to the research work of Khan et al (2020), in which the researcher explained that a well‐managed customs clearance process increases economic growth. Chakamera and Pisa (2020) discussed that an effective custom clearance process helped firms get their import production input without delay. Pisa (2019) demonstrated that better logistic performance could enhance a country's growth and competitiveness.…”

“…It is also evident that using renewable sources in logistics can create a better impression of a country due to improved environmental sustainability and economic progress (Khan, Yaseen, & Ali, 2019). Additionally, Chakamera and Pisa (2020) also support the positive association of improved logistics efficiency and performance with higher economic growth in the long run. Thus, advanced logistics play a crucial role in reducing costs, improving efficiency and service quality, enhancing business performance, and economic development.…”

“…For instance, economic growth strategies related to exports, services, investments, transportation, and logistical infrastructure have been discussed in the literature of economic growth and development (Cigu et al, 2019; Khan et al, 2020; Palley, 2012). Recent studies identified that transport and logistical infrastructure have an essential role in achieving economic growth (Chakamera & Pisa, 2020; Wang et al, 2021). Logistics has become an emerging research area considering its importance in creating employment and facilitating economic development (Tang & Abosedra, 2019).…”

Gross domestic product and logistics performance index drive the world trade: A study based on all continents

“…This analysis has been conducted by only considering the global trade performance statistics of countries in 2016. From the 6 sub-components of LPI, only two “competence of logistics services” and “quality of trade and transport-related infrastructure” have a weak, yet positive correlation with GDP per capita: indicator of economic growth [ 38 ]. In reality, the ability of Sub-Saharan Africa nations to link to global value chains is heavily influenced by the regional dimension of infrastructure and trade facilitation policies [ 39 ].…”