Relationships of Selected Key Logistics Factors and Logistics Performance Index of Sub-Saharan African Countries

Abstract

Logistics and supply chain bottlenecks are magnified with inefficient business processes and can result in increases of trade costs. Logistics Performance Index is a measure of how well different countries perform in their logistics activities to increase trade efficiencies. This study tries to explore the relationship of critical logistics factors with logistics performance index (LPI) developed by the World Bank. By taking Rwanda as a case study, the paper also explores the performance differences in logistics between landlocked and coastal countries, among countries within the same region, and income group. It shades light how a landlocked and low-income country was able in a decade to improve its logistics performance. The findings of two-stage least square provides a single estimated logistics index. It can explain the multiple logistic indicators which can be used to improve the ability to compete and improve logistics performance. Moreover, countries in the study, as well as other countries can utilize this estimated index to target policy actions to improve logistics operations.