Agro-industrialisation and e-commerce drive Africa’s logistics market to record highs
A key driver of this momentum is the rapid expansion of e-commerce, with the continent’s online retail market projected to surpass $75 billion (Sh9.7 trillion) by the end of 2025.
Africa’s industrial and logistics sector is experiencing record growth, with modern warehouse occupancy rising to 83 per cent in the first half of 2025, up from 75 per cent a year earlier.
The 10.7 per cent year-on-year increase underscores a sustained demand for Grade A logistics space, which continues to outstrip supply across major urban and trade corridors.
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These insights are drawn from Knight Frank’s Africa Industrial Market Dashboard for H1 2025.
A key driver of this momentum is the rapid expansion of e-commerce, with the continent’s online retail market projected to surpass $75 billion (Sh9.7 trillion) by the end of 2025.
“This surge is putting pressure on distribution networks and fuelling demand for climate-controlled facilities and last-mile delivery infrastructure,” Knight Frank noted.
Agriculture-led industrialisation is also playing a significant role in the sector’s growth. Agriculture accounts for about 32 per cent of Africa’s GDP and employs over 65 per cent of its population, according to the World Bank.
The African Development Bank (AfDB) estimates that value addition in sectors such as cotton-to-textile can raise raw value capture by up to 600 per cent, highlighting the catalytic potential of agro-processing.
According to Boniface Abudho, research analyst at Knight Frank Africa, this growth reflects the maturing of Africa’s industrial real estate into a core investment asset class.
At the regional level, South Africa, Egypt, and Nigeria continue to lead industrial development. South Africa benefits from its diverse manufacturing base and robust infrastructure, Egypt leverages its strategic location near Europe and the Middle East, while Nigeria’s advantage lies in its large-scale industrial firms.
Meanwhile, Kenya, Ethiopia, Ghana, Zambia, and Tunisia are emerging as promising industrial hubs. Zambia, in particular, has seen a notable rise in demand for mid-sized production and warehousing units, driven by agro-linked manufacturing and fast-moving consumer goods (FMCGs).
The report also points to progress towards greater self-sufficiency and reduced reliance on imports. A prime example is the Dangote Petroleum Refinery in Nigeria.
With a capacity of 650,000 barrels per day and a construction cost of $20 billion (Sh2.6 trillion), the refinery is expanding to other African markets by establishing fuel storage tanks in Namibia with a capacity of at least 1.6 million barrels of gasoline and diesel. These will serve key markets across southern Africa, including Botswana, Zambia, Zimbabwe, and Namibia.
Knight Frank notes that this development will reshape regional energy trade, boost intra-African commerce under the AfCFTA, and cut dependence on external markets.
Currently, only 14.4 per cent of Africa’s exports are traded within the continent, compared to over 60 per cent in Europe and nearly 58 per cent in Asia.
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