The Center for Applied Research and Innovation in Supply Chain – Africa (CARISCA) based at the Kwame Nkrumah University of Science and Technology (KNUST) has developed Ghana’s first Logistics Managers Index (LMI) which seeks to measure the growth or decline of Ghana’s logistics industry based on eight key components.
Ghana’s economy post-COVID is on the rebound, and one of the sectors facilitating this turnaround is logistics, a major contributor to Ghana’s GDP. Previously, logistics activities in Ghana were not measured or monitored. This situation changed with the LMI.
“African businesses need more reliable local data,” says Nathaniel Boso, CARISCA director and a co-author of the index. “Information on business activities in Ghana and other countries in sub-Saharan Africa is limited. The LMI will help track the movement of logistics activities in the business sector to fill the present information gap.”
CARISCA’s first Logistics Managers Index shows a rise in logistics activities in Ghana.
This increase is welcome news, as it indicates the opening up of the Ghanaian economy after the pandemic.
The LMI is calculated as a percentage value that reveals whether logistics activities are increasing or decreasing. The mid-value/threshold is 50.0%. A value above 50% indicates a growing logistics industry, while a value below 50% indicates a shrinking logistics industry.
The first-quarter report indicates that the overall Logistics Managers Index (LMI) for Ghana stands at 64.7, which is indicative of growing logistics activities in the country. According to the report, logistics costs are generally high, with three cost-related indicators (warehouse prices, inventory cost and transport prices) recording the highest values of all the indicators.
The report also reveals a need for more warehousing and customer fulfilment facilities close to major cities and towns, as demand for warehousing outstrips supply.
Current inventory levels are high, reflecting strong demand for goods and services in the country. The report projects that there will be continuous growth in logistics activities over the year, which will have spill-over effects on the entire economy.
The LMI provides insights for the government, business decision-makers, market analysts and investors.
According to Mr. Mark Amoamah, national president of the Chartered Institute of Logistics and Transport, “this new index by CARISCA provides a timely measure of movement in logistics activities in Ghana and identifies prevailing trends. The data should improve the visibility and efficiency of Ghanaian supply chains.”
This tool is the first of its kind in Africa. It provides supply chain managers in Ghana with evidence-backed data and information to enable effective supply chain planning. The LMI is based on a survey of logistics, supply chain and procurement managers across multiple industries in Ghana.
CARISCA will continue to capture, analyse and share LMI findings quarterly on its website, https://carisca.knust.edu.gh/lmi.
Senior executives and managers of Ghanaian organisations have been invited to participate in the quarterly LMI surveys: https://www.surveymonkey.com/r/3RJ3FCX.