Details

-GCC states prioritising development of logistics sector

 

-Al Mazaya Report: Logistics industry key catalyst for investment competitiveness

                             

-MENA e-commerce market to grow to $200 billion by 2020

 

-Logistics sector accounts for 20% of Bahrain’s GDP

The logistics sector in the region is set to garner more support and secure further growth over the coming period as it has managed to survive many of the challenges faced during the past years, as a result of the decline in global oil prices and the concomitant fall in government spending. Needless to say that the sector is significantly vulnerable to global financial and economic conditions and relies on government development plans and the ability of the private sector to contribute  effectively to financial and macroeconomic performance.

According to Al Mazaya Holding’s weekly real estate report, the logistics industry will have more chances of success after the oil markets have weathered the headwinds. The energy price recovery will reflect positively on oil revenues and the volume of investments allocated to drive the sector. The development of the logistics sector will positively reflect on SMEs and will necessarily ensure the development of key economic platforms in the region over the coming years.

The report indicated that the countries of the region attach great importance to the development of the logistics industry. The development plans and the economic transformation drives are increasingly dependent on the development of this sector, which will ultimately contribute to supporting the financial performance and sectoral and macro indicators.

The weekly real estate report of Al Mazaya Holding highlighted the great importance of logistics zones in the economies of the region based on the accumulated achievements made over the years.

The report says that the Kingdom of Bahrain is working to stimulate the industrial-cum-commercial sector, which now accounts for more than 20% of GDP. In the meantime, the Kingdom has not abandoned its ambitions to become a regional hub for logistics and industrial services.

Al Mazaya reports that the Kingdom of Bahrain continues to implement a package of projects with comprehensive economic objectives in order to provide  an investment-conducive environment.

The logistics industry derives its strength and growth from the industrial sector, where the Kingdom of Bahrain has advanced positions at the level of small and medium industries, which are already strong enough to contribute to economic diversification plans and expand the contribution of the private sector to the economic development drive and the creation of permanent investment and employment opportunities.

With regards to Egypt, Al Mazaya Holding’s weekly real estate report pointed out that the Egyptian logistics industry still needs to be further developed and transformed across the board. This comes at a time as Egypt ranked 67th on the logistics performance index for 2018. It comes 7th in the Arab world, outpaced  by all Gulf countries. This index reflects the components of the main performance of key sectors, including customs and  infrastructure, including the quality of services offered.

The report says that the Egyptian logistics industry primarily requires political stability, an objective the country is trying to ensure by all means. However, the country lacks comprehensive and clear-cut  economic  plans  and strategies for the development of the logistics industry, specially that country’s legislation often backfires and need to be more homogeneous to contribute to the development of the sector. The report says that reforms being implemented at the level of infrastructure and the establishment of industrial cities to enhance the competitiveness of the industrial sector as a whole are aimed at ensuring a growth rate of 6.3% during the current year and 10.7% by 2022.

Al Mazaya Holding’s weekly real estate report added that the UAE logistics industry maintains a prestigious position, ranking 11th globally thanks to the country’s economic policies aimed at achieving economic diversification while building competitive and sustainable national industries. On the other hand, current and future efforts in the country are focused on increasing the contribution of the logistics sector to GDP, augmenting the share of the UAE market of goods flowing to the countries of the region, as well as improving the global ranking of the industry by drawing investments into the infrastructure sector while focusing on innovation and development of supply chains as the current trend is to tap new markets to companies operating in the country and to attract more firms wishing to reach their target markets regionally.

The logistics sector is expected to achieve more growth according to current industry data. The air cargo sector is expected to expand at a cumulative growth rate of 4.8% by 2021, while the strong non-oil performance of the transport and logistics will continue.

The e-commerce boom is expected to further stimulate the sector, with the size of online trade in the Middle East and North Africa forecast to surge to about $200 billion by 2020, an increase of more than 100%, of which UAE gets a significant share in line with expectations that the contribution of the UAE industrial sector to GDP will hit 20% by 2030.

On Oman, Al Mazaya Holding’s weekly real estate report pointed out that the Sultanate’s logistics sector is progressively growing locally and internationally, with the country ranking 43rd globally. The growth of the logistics sector in Oman is attributed to the follow-up maintained by government agencies to develop the industry. The Sultanate is a signatory of the international air transport agreement and it is increasing the establishment of customs warehouses and strengthening partnership with the private sector.

In this context, collective efforts are being made in supporting and developing the logistics sector and increasing its contribution to the GDP to OMR 14 billion by 2040.

The report added that the seaports are one of the key elements of the logistics sector in addition to the geographical location of the Sultanate. The government seeks to increase the contribution of the logistics sector to the GDP to OMR 2 billion by 2020, with efforts underway to increase investments related to the logistics industry by at least OMR 1 billion during the same period.

Al Mazaya Holding’s weekly real estate report noted that the magnitude of trade disputes between global trade and economic blocs is not yet clear. It is difficult to assess the overall impact of these conflicts on the global trade movement and logistics services that contribute in one form or another to accelerating and moving these activities and adding to their spread around the world. Under these changing and complex equations, the sector will maintain its pace of activity and make more achievements, seeking to raise its contribution to the GDP.