Tanzania outshines peers as EAC fairs poorly in logistics survey

25Jan 2016
Our Reporter
The Guardian
Tanzania outshines peers as EAC fairs poorly in logistics survey

Tanzania has topped its EAC bloc peers in a new logistics index that uses economic and trade data, social indicators and transport development to rank 45 emerging markets in which China leads the pack.

Tanzania flag

The company behind the index, Agility of Kuwait, says the rankings seeks to enable developing nations to establish efficient supply chains that power businesses and drive trade, creating access to new opportunities.

According to the Agility Emerging Markets Logistics Index 2016 released recently, Tanzania is ranked 40th while Kenya and Uganda are in positions 43 and 45 respectively.

Rwanda and Burundi are not included in the logistics chart.

“The Index, in its 7th year, offers a snapshot of logistics industry sentiment and ranks the world’s 45 leading emerging markets based on their size, business conditions, infrastructure and other factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors,” Agility said in a statement.

The survey involved 1,100 logistics and supply chain executives, who expressed optimism for this year saying they expect an uptick in emerging markets growth in 2016, despite concerns about further slowing in China, fluctuations in oil prices, and the possibility that the US economy could weaken.

After a year of turbulence, 61 per cent of the logistics industry executives said they were unclear on the direction of the global economy or expect more volatility in 2016. In spite of their wariness, roughly the same proportion (59.4 per cent) say the International Monetary Fund (IMF) forecast of 4.7 per cent growth in emerging markets is “about right”.

Emerging markets grew an estimated 3.6 per cent to 4.2 per cent in 2015, down from 4.5 per cent in 2014. The EAC economies with the exception of politically turbulent Burundi are currently among the top growth performers in the world with Tanzania expected to record a GDP expansion of seven per cent this year.

The country, whose growth averaged 5.5 per cent during 1997-2006 according to Harvard University, which forecast the 2014 and 2015 growth rates at seven and 6.9 per cent respectively, has an estimated GDP value of slightly over US$40 trillion.

““Macroeconomic performance in Tanzania remains strong and medium-term prospects are favourable,” IMF says in its latest assessment of the national economy, which was released on Friday.

For the first time, supply chain professionals surveyed see India – rather than China – as the emerging market with the most growth potential. And in the overall Index rankings, India climbed two spots to No. 3, behind only China and United Arab Emirates (UAE), on strong economic performance and initial reforms launched by the government of Prime Minister Narendra Modi.

China, the world’s second-largest economy, remains the leading emerging market by a large margin. Among the countries at the top of the Index rankings, UAE (No. 2), India (3) and Malaysia (4) leaped over the commodity-dependent economies of Saudi Arabia (5), Brazil (6) and Indonesia (7).

Rounding out the top 10 were Mexico (8), Russia (9) and Turkey (10). Africa’s top performer is South Africa, which is ranked 16th globally followed by Nigeria (17) and Morocco that is 20th.

“Nigeria (No. 17) and Egypt (No. 22) climbed 10 spots in the data-driven portion of the Index, the biggest gains by any country in seven years of rankings,” Agility said in the statement.

“The potential of Nigeria, Africa’s largest economy, has come into sharper focus since the government updated the methods it uses to track economic performance. Egypt’s economy and business climate have stabilized under its military government.”

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