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Setting The Standard with Dawa – An SEZ Fit for the Warehousing and Logistics Industry in Ghana
  • December 5, 2022
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Ghana, a country in West Africa, has gained recognition in sectors that facilitate the movement of goods as a logistics hub for the World Food Program. Accompanying investments from private companies and public-private partnerships have boosted warehousing in Ghana. According to the World Bank’s Logistics Performance Index, Ghana, which has a population of over 31 million, has one of the fastest-growing economies in Africa. Ghana’s coast stretches 328 miles along the Atlantic Ocean in West Africa, just north of the equator, giving it easy access to major maritime routes.

Ghana exports through two major seaports on the Gulf of Guinea, an embayment of the Atlantic. Tema is situated fifteen miles to the east of Accra, the nation’s capital. About 113 miles west of Accra in the other way is Takoradi. Additionally, Ghana is home to four international airports, one of which is Kotoka International Airport in Accra. Ghana is not an inland country but attributes its growth to three factors. One is that it is one of the few countries in West Africa with a significant industrial sector. The other two factors are one, the hilly terrain of Ghana’s interior region, which limits the available land for industrial development: and two, the availability of land for agriculture in the coastal belt. The third factor that contributes to Ghana’s growth is its transportation infrastructure (Suale) including roads, railways, and airports.

These three factors together have created an environment conducive to investment and growth in logistics solutions. As a result, Ghana has attracted considerable attention from businesses seeking to relocate or expand within West Africa or beyond. In fact, the country has positioned itself as a logistics hub for West Africa and beyond. Ghana has taken the lead in the development of its seaports, rail infrastructure, and road infrastructure to accommodate an increase in trade.

Photo by Tobias Nii Kwatei Quartey on Unsplash

Ghana’s present economic growth is being driven by its industrial sector, which accounts for about 20% of all investment in West Africa. Growth in some areas is, however, constrained by a shortage of large warehouses and logistical facilities, although warehouse projects are underway that will soon address this problem.

The warehouse industry in Ghana is at a critical juncture. The last three decades have seen retail businesses emerging like mushrooms after a rainstorm across the length and breadth of Ghana’s landscape. Like mushrooms, these retail enterprises need reliable and secure warehousing facilities to ensure the provision of goods to their customers without fail.

Businesses and investors need more than the ordinary commercial warehouse to meet their needs. They need a specialised warehouse that will not only protect the products from the elements but will also address other requirements such as climatic conditions, security, and timely and reliable delivery of their goods. Ghana’s warehousing and logistics sector is trying to chart a new course forward to address all these challenges.

The rapid growth of the retail sector in Ghana in just two or three decades has created a huge demand for efficient and reliable warehousing solutions. The growth has been so rapid that it threatens to overwhelm existing commercial warehouse facilities. As a result, there is a pressing need for more efficient storage facilities capable of handling high volumes of products in an efficient way.

As a result, the warehousing industry in Ghana is now at a crossroads. The rapid growth of retail in Ghana underscores its expanding consumer base, which requires additional warehousing space. At the same time, however, industrial businesses are seeking to expand and consolidate operations in order to improve their efficiencies and reach an international level of service. This has forced mining companies and other industries that export capital goods such as chemicals and food products (imported into Africa through Ghana) to consider further investments in warehousing solutions.

It takes about three days for a container to travel from China to Ghana; and the goods need to be warehoused in between so that goods can meet the deadline for delivery to customers. Some investors are looking at warehouses that serve both commercial and industrial clients, because commerce is usually closely linked with industry.

Companies such as South Africa’s Bidvest Logistics have established operations in Ghana, while other companies including IFC (The International Finance Corporation), a member of the World Bank Group, have invested in various warehouse projects across Ghana.

The West Africa Logistics Hub (WALH) was established by IFC in 2012 with funding from The World Bank. WALH works with the private sector, public and community sector to facilitate the hub concept. WALH plans to build a logistics hub in a town, as part of its efforts to facilitate trade in West Africa. The hub will enable customers – both businesses and industries – to easily reach the right solutions that meet their needs.

Ghana’s experience has shown that a successful logistics hub must have three components: physical infrastructure such as roads, railway systems and ports; human capital such as education; and social capital such as human resources (skilled labor). The logistics industry of Ghana is now moving towards an optimal solution or in other words one which can optimise all these factors.

While the COVID-19 pandemic has interrupted commercial activity in Ghana and around the world, it has also compelled African countries to come up with novel trade solutions. The continent is changing quickly. The Accra-based African Continental Free Trade Area (AfCFTA), which was delayed by six months because of the pandemic, officially began operations in January 2021. The largest free-trade region to be established since the World Trade Organization’s founding was brought about by the AfCFTA. Africa’s 1.2 billion people and $3 trillion in combined GDP today form a single market for products and services. AfCFTA features include reduced tariffs, unrestricted movement of people, and the opening of new trade routes.

The signatory nations anticipate that the AfCFTA will increase trade among African nations and encourage industrialization. The Ghanaian government, like other African governments, is committed to promoting investment in its logistics infrastructure to support the developing continental market. This includes enhancing Ghana’s ports, transportation network, and warehouses.

Dawa Industrial Zone As An Instrument to the Ware Housing and Logistics Industry

Special Economic Zone like the Dawa Industrial Zone in Tema, Ghana is a place where opportunities abound. The Dawa Industrial Zone has been instrumental in the development of Ghana’s warehousing and logistics sector by providing them with the opportunity for business expansion. Currently, there are various warehouse operations in Ghana like warehouse companies, cargo terminal operators, and agents as well as other related service providers. The sector serves both domestic and international markets. The International Monetary Fund (IMF) reports that the warehousing and logistics sector combines land transport with storage facilities to provide solutions to the difficulties involved with moving goods by road. These solutions include providing physical storage facilities, delivery services to multiple destinations, and coordinating suppliers of raw materials for companies.

The Dawa Special Economic Zone has been instrumental in the development of the warehousing and logistics industry by pioneering initiatives that have significantly boosted the sector’s growth. The zone has overall supported warehousing and logistics activities which have been multi-faceted in nature. The zone has been the home of several leading companies in the local and international market, who offer a wide array of services including storage, repacking, transit, and importation services. The zone has also hosted various conferences assembling stakeholders and government officials to discuss ways of supporting warehousing services.

The development of the logistics industry in the country cannot be over-emphasized as it has helped provide solutions to transportation issues, contribute to economic growth and enhance production efficiency in Ghana’s industrial sector. The issue that is majorly affecting the warehousing and logistics industry in Ghana is the lack of adequate infrastructure facilities along with limited access to finance for expansion or modernization purposes.

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Email: enquiry@diz-ghana.com
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