Great things await Africa

By on March 26, 2014

Last week as he was driving through Johannesburg, a board member of a multi-billion Rand multinational made a rather bold statement, “Africa is not only the last frontier but possibly the biggest frontier for business”. 

The comment was made by Ken Allen, Global CEO for DHL Express, and highlights how important Africa is to global boardrooms. Charles Brewer, Managing Director for DHL Express Sub-Saharan Africa shares his sentiment and adds, “More than ever, companies are now looking to expand into Africa. More than ever, companies are looking to invest in its diverse markets. More than ever, commercial opportunities abound across the continent. It’s clearly time for Africa.”

The market is growing

Brewer points to the recent International Air Transport Association (IATA) Airline Industry Forecast 2013-2017 report, which revealed that Africa is estimated to be the fastest growing region globally over the forecast period, with an expected five-year compound annual growth rate (CAGR) of four percent, while a growth rate of 3.2 percent CAGR is expected for international freight volumes.

“The International Monetary Fund (IMF) has forecasted economic growth of 2.8 percent in 2014 for South Africa, and 6.1 percent for the sub-Saharan African (SSA) region, and with the continued growth from intra-Africa and international trade, the outlook for the SSA logistics industry is extremely positive,” says Brewer.

He says that the routes expected to experience the most significant growth in Africa in 2014 are linked to the fastest growing markets and entrepreneurship which include Ethiopia, Ghana, and Nigeria. “Africa is an unbelievably entrepreneurial and dynamic continent and I firmly believe that the SMEs will be the engine of growth for the years ahead”.

E-commerce on the rise

He says that it is difficult to ignore e-commerce on the continent as it has become a way of life. “Buying and selling online is growing year-on-year in Africa, which includes a big shift towards e-commerce in South Africa. More than R4 billion worth of goods were traded through e-commerce in 2013 in South Africa as consumers realise the safety, convenience, and time saving benefits of shopping online. Other factors that will likely influence trade are developments in technology, healthcare, construction and services, as well as the increase in manufacturing in Africa.”

“The key to continue driving growth will be smart, innovative, and, above all, customer centric people, processes, and solutions, as well as a continued focus and investment in market leading infrastructure”, concludes Brewer.

Five tips for doing business in Africa:

  • Focus on your people, invest in their development and recognise culture diversity
  • Service/product differentiation is key
  • Understand and adapt your brand to the local market
  • Be aware of the risk and mitigate through solid fiscal control process
  • Above all else – be bold and brave

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