Africa is destined for a five-year compound annual growth rate (CAGR) of 4.0%, while its international freight volumes will see a 3.2% growth rate, making it the fastest growing region globally through 2017, according to the recent International Air Transport Association (IATA) Airline Industry Forecast 2013-2017 report. More specifically, the International Monetary Fund (IMF) forecasts economic growth of 2.8% in 2014 for South Africa, and 6.1% for the sub-Saharan African (SSA) region.
“With the continued growth from intra-Africa and international trade, the outlook for the SSA logistics industry is extremely positive,” says Charles Brewer, managing director for DHL Express Sub-Saharan Africa. “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…”
Brewer made these statements as Deutsche Post DHL announced revenues of more than EUR 55 billion with boosted profitability in 2013. These improvements were largely attributed to the company’s market position in emerging markets, including Africa. The routes expected to experience the most significant growth in Africa in 2014 are linked to the fastest growing markets which include Ethiopia, Ghana and Nigeria.
“Africa is an unbelievably entrepreneurial and dynamic continent and I firmly believe that small and medium enterprises (SMEs) will be the engine of growth for the years ahead.”
Brewer attributes much of this growth to e-commerce, stating that more than R4 billion of goods were traded through e-commerce in 2013 in South Africa. Other factors he believes will influence trade are developments in technology, healthcare, construction and services, as well as the increase in manufacturing in Africa.
Brewer says that this year, his company has various planned investments into Sub-Saharan Africa, including the opening of a number of new facilitates, and planned expansion in Ethiopia, Kenya, Nigeria, South Africa, Ghana and Angola. DHL Express SSA, will also be expanding its dedicated air fleet adding a number of new planes to the East Africa region, including a Boeing 737.
Brewer believes that while there are continued challenges, his company is confident about trade forecasts for the year ahead. He offered five tips for other companies wishing to do business in Africa:
- Focus on your people, invest in their development & recognize 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.