You can't deliver what you can't store: Africa's warehousing gap

Business Insider

09-06-2025

The latest growth figures from Africa are encouraging. Africa's digital payments market is expected to reach $1.5 trillion by 2030 according to a Mastercard-commissioned report by Genesis Analytics. Some optimistic projections suggest that the digital economy on the continent could hit $1 trillion in the next five years. This is driven by mobile adoption, fintech, e-commerce, and the young generation of consumers, acquainted with digital tools from an early age. Already, 646 million people are online across Africa.
All these create great opportunities for an e-commerce boom to happen in the decade ahead. But is it achievable? It's easy to scale on paper, but much harder in reality. The truth is that African e-commerce scales faster than warehousing is being developed. While the delivery process starts from the warehouse, there's still a gap between the delivery speed customers expect and what they actually receive.
Growing demand for delivery and weak warehousing infrastructure are already two of the biggest industry challenges, and the problem is expected to worsen in the coming years. While e-commerce-generated demand can be scaled easily, warehousing infrastructure is too slow to keep the same pace.
2.Africa's warehousing infrastructure today
Imagine how many flexible delivery routes and warehouse points you'll find in a place like Lagos, Nigeria – then compare that to somewhere like Nguru, a suburban town. Add up the delivery speed, infrastructure reliability, access to logistics partners, and overall costs – and the gap becomes clear.
While it's no wonder that warehousing infrastructure differs in large cities and regions, it's not just about the network of storage points but how efficiently they operate and support last mile delivery. In many cases, warehouses have insufficient equipment, staff, or transport access, and that slows down everything.
Let's look at the numbers:
According to Knight Frank 's "Africa Industrial Market Dashboard H1 2024" report, demand for warehouse space across Africa jumped by 18% owing to the expansion of the agricultural sector and e-commerce steady growth.
Automation is still rare and unsystematic. According to IVHU Africa, only about 15% of warehouses in Africa use any form of automation, like conveyor belts or smart storage systems. Most processes are still manual, and there's a lack of automation, which slows down everything.
Infrastructure issues raise costs. Gaps in roads, power, and internet make trade in Africa up to 50% more expensive than the global average, says UNCTAD.
Warehousing infrastructure varies across Africa's major cities and regions. The difference is easy to see: cities like Nairobi and Lagos have top logistics areas that are almost full. But in many towns and rural areas, there's still not enough proper storage space. This gap makes supply chains slower, making it harder for small businesses to grow and reach new customers.
Rental prices also tend to differ depending on the region. In the first half of 2024, demand for warehouse space in Africa went up by 18%. Now, warehouses in cities like Johannesburg, Nairobi, and Lagos are almost full, with around 85% occupied. Because of the shortage, rental prices have gone up: $6 per square meter in Nairobi, $5.50 in Johannesburg, and $5 in Lagos. This makes it harder for businesses to find affordable, high-quality storage.
Below is a table showing the latest prime warehouse rents in major African cities to give a clearer picture of how costs compare across the region. As demand continues to grow and supply remains limited, closing the infrastructure gap will be critical for Africa's further e-commerce and trade growth.
3.What it means for SMEs: Jiji's perspective
At Jiji, we see the situation from the inside – and for small and medium-sized businesses, poor warehousing infrastructure leads to real, everyday challenges.
First, it's hard to keep goods in proper condition when there's limited access to clean, secure, and climate-controlled storage. This leads to higher risks of damage or loss, especially for items like electronics, beauty products, or perishables.
Second, faster warehouse turnover is becoming more important as online demand grows. Sellers who can move stock quickly are better positioned to respond to customer needs and take advantage of rising interest in everyday categories like home goods and fashion. As the market becomes more dynamic, improving stock flow is a key opportunity, not just a challenge.
Third, scaling becomes a major barrier. Without reliable storage and supply chain support, many small sellers simply can't grow beyond a local level – even if they have the demand and product quality.
From Jiji's experience, one thing is clear: for many of our active sellers, logistics is still a major barrier to growth. Sellers in major cities tend to grow faster thanks to better access to warehousing, delivery services, and fulfillment partners. In metropolitan areas, it's also easier to solve last mile delivery – there are more couriers, and higher delivery volumes help create competitive pricing. But in rural or less developed areas, the infrastructure simply isn't there, making deliveries more difficult compared to urban locations.
4.Solving the infrastructure challenges
So, how do we close the infrastructure gap? It starts with stronger collaboration between logistics companies and the tech sector – both have a vital role to play in building smarter, more flexible systems that meet the needs of today's fast-growing digital economy.
We're already seeing progress. In West Africa, key markets like Nigeria and Ghana are seeing more private investment in last mile delivery and cross-border coordination. East Africa is further ahead in digital tools and regional collaboration, which improve efficiency and expand reach.
Logistics companies, for their part, can help by offering affordable, reliable storage and delivery solutions – especially in areas that lack infrastructure. Small businesses need storage options that are flexible and easy to scale. Shared storage spaces or pay-as-you-go models can help them grow without spending too much.
E-commerce market players can help improve the logistics in Africa, as online search and home delivery are becoming increasingly popular across the continent, especially in large cities like Lagos. As more people order online, delivery volumes grow, helping lower costs and improve efficiency. The logistics market is still fragmented and largely informal, but step by step, delivery is becoming the new normal for everyday shopping.
'We know the logistics gap won't close quickly, especially with demand growing this fast,' says Anton Volyanskyi, CEO of Jiji. 'But platforms like Jiji can help move things in the right direction – by supporting sellers, growing local trade, and highlighting where improvements are needed most.'
5.To sum it all up
E-commerce in Africa is growing fast – and it's no longer just about connecting buyers and sellers through an app. Behind every transaction is a system that needs strong logistics and smart infrastructure. We're already seeing positive changes in the market. More people are shopping online for everyday items like home goods, clothing, and personal care products – and they expect fast, reliable delivery. As demand grows, delivery volumes rise, which helps make logistics more affordable and efficient. Improving warehousing and delivery networks will help meet this growing demand and support the next wave of growth in Africa's consumer market.