Advances in Last-Mile Delivery in Africa

Background to Last-Mile Market in Africa

Africa’s last-mile delivery sector is undergoing a multiple level transformation process, driven by changes in rapid urbanization, a booming e-commerce industry, and innovative technological advancements.

As the continent’s population grows—projected to reach 2 billion by 2050—and over 60% of Africans are expected to live in urban areas by 2030, the demand for efficient, reliable, and cost-effective delivery solutions is surging.

With our focus on the logistics industry this mont, Business Tech Africa took a look at the current last-mile delivery landscape in Africa, recent developments addressing local challenges, market size, projected growth, and the role of technology in reshaping the marketplace.

The Current Last-Mile Delivery Landscape in Africa

The last-mile delivery sector in Africa faces unique challenges, which including inadequate infrastructure, security problems, imprecise postal address systems, and operational inefficiencies.

Poorly maintained roads are commonplace, while in remote areas access is often limited by infrastructure failures such as bridge collapses. In city centres, and traffic congestion can seriously complicate logistics.

Additionally, corruption and regulatory hurdles in some regions impede progress, however despite these obstacles, Africa’s last-mile delivery market is thriving, fuelled by a growing  middle class, increasing connectivity and mobile network penetration, and a large, tech-savvy younger demographic driving e-commerce growth.

Ecommerce Driving Developments

The rise of e-commerce is a primary driver, with countries like Nigeria, South Africa, Egypt, and Algeria leading the charge.

South Africa’s e-commerce revenue is projected to grow from $7.07 billion in 2022 to $14.9 billion by 2027. The business-to-consumer (B2C) segment dominates this market currently, accounting for approximately 70% of market revenue in 2023, as consumers increasingly demand same-day or next-day delivery.

Added to this is an increasing Business to business e-commerce market, particularly in smaller to medium businesses (SME’s), where growth in ecommerce in things such as parts and food items is growing rapidly.

Hyperlocal delivery models, particularly in urban hubs like Lagos, are gaining traction, offering quick fulfilment within hours to meet consumer expectations for speed and convenience, with new start-ups appearing regularly on the landscape and driven by advances in technology and AI

Recent Developments Overcoming Local Challenges

Innovative solutions are addressing Africa’s logistical challenges. Key players like WumDrop, Picup Technologies, Pargo, Sendy, and Kobo360 are leveraging technology to streamline operations. For example:

1. Digital Platforms and Route Optimization: Companies are adopting AI-powered route optimization tools, GPS tracking, and predictive analytics to navigate complex urban environments and reduce delivery times. Kobo360, a Nigerian logistics platform, uses real-time tracking and data analytics to optimize freight delivery, cutting costs and improving efficiency.
2. Hyperlocal and Community-Based Models: In rural areas with limited infrastructure, mobile delivery hubs and community-based models are emerging. Pargo’s pick-up points and locker delivery systems in South Africa allow consumers to collect parcels at convenient locations, bypassing the need for precise addresses.
3. Drone and Autonomous Delivery: Drones are being tested to overcome infrastructure gaps, particularly in healthcare. Zipline, in partnership with governments in Ghana and Rwanda, delivers blood and medicines to remote areas, demonstrating the potential for drones in last-mile logistics. While regulatory challenges persist, drone technology promises to revolutionize delivery in hard-to-reach regions.
4. Sustainable Practices: The adoption of electric vehicles (EVs) is gaining momentum, supported by government incentives and consumer demand for eco-friendly solutions. A 2025 post on X highlighted Africa’s emerging EV fleet for sustainable last-mile delivery, aligning with global green logistics trends.
5. Government Initiatives: Investments in infrastructure, such as Algeria’s efforts to improve transportation networks and Saudi Arabia’s Vision 2030, are enhancing logistics capabilities. These initiatives provide a foundation for more efficient last-mile services.

These developments have mitigated challenges like poor infrastructure and high costs. For instance, hyperlocal models reduce the need for extensive road networks, while AI-driven analytics optimize routes to bypass traffic congestion. Similarly, drone deliveries address accessibility issues in rural areas, ensuring timely delivery of critical goods.

Market Size and Projected Growth (2025–2030)

The African last-mile delivery market is experiencing robust growth. In 2024, the market was valued at approximately $5.15 billion, with projections estimating it will reach $8.93 billion by 2031, growing at a compound annual growth rate (CAGR) of 8.2%. Another estimate suggests a value of $2.78 billion by 2032, with a CAGR of 8.45% from 2022 to 2032. South Africa, a key market, is expected to grow from $2.01 billion in 2023 to $3.31 billion by 2030, at a CAGR of 7.4%.

This growth is driven by the expansion of e-commerce, urbanization, and technological integration. The B2C segment will continue to dominate, with e-commerce clients as the leading industry sub-segment. Nigeria, South Africa, and Egypt are poised to lead regionally due to their large internet user bases and growing digital transactions. The rise of same-day delivery, with annual growth rates of 36% for instant delivery, underscores the market’s shift toward speed and convenience.

Impact on the Marketplace

Over the next five years, the last-mile delivery market in Africa will become more competitive and consumer-centric. Established players like DHL and FedEx are likely to face increasing  competition from innovative startups leveraging technology to offer faster, cheaper services. This is also likely to see acquisition of these Start-ups by larger players in the delivery environment.

The shift toward sustainability while likely to push larger companies to adopt EVs and green practices, this will also come at additional costs, with energy prices in Africa quite high. However there may still be down-stream reducing long-term expenses.

Consumers will certainly benefit from greater delivery options, including same-day services and flexible pick-up points and time specific deliveries, driving e-commerce adoption further.

However, challenges like regulatory hurdles, high initial investment costs for autonomous technologies, and infrastructure gaps in rural areas will require ongoing collaboration between governments, businesses, and technology providers. Addressing these will unlock the market’s full potential, positioning Africa as a global leader in innovative last-mile solutions.

The market’s projected growth to nearly $9 billion by 2031 reflects its immense potential, driven by e-commerce, urbanization, and a commitment to sustainability. As AI, drones, EVs, and smart logistics solutions redefine the landscape, Africa is poised to deliver not just goods but a new era of connectivity and economic opportunity.