Nigeria, Ghana Africa’s rising stars, says PwC report
A PwC report on ten African countries on Wednesday named Nigeria and Ghana as Africa’s rising stars in terms of their future prospects for the transportation and logistics industry.
PwC capital projects and infrastructure solutions associate director Andrew Shaw said in Johannesburg that Nigeria should see its economy double in ten years, should it manage the average 6.8% gross domestic product (GDP) growth forecast for 2012 to 2017.
Nigeria was ranked as the world’s fourth-fastest growing economy, driven largely by oil exports.
Shaw said the Nigerian government had ambitious plans to expand its infrastructure, rated in the study as average, to assist in growing the economy further.
A new $1.6-billion deep-sea port was planned at Lekki, while $2-billion would be invested to reconstruct 2 000 km of rail.
The ten countries included in the study, completed with the assistance of Econometrix in South Africa, were Algeria, Angola, the Democratic Republic of the Congo (DRC), Egypt, Ghana, Kenya, Mozambique, Nigeria, South Africa and Tanzania.
The countries were judged against each other in terms of demographics and resources; economics; business environment; trade and logistics; and transport infrastructure, with each rated as either ‘attractive’, ‘average’ or ‘unattractive’.
South Africa fared best overall, with attractive economics, business environment, trade and logistics and transport infrastructure, although it scored an average on demographics and resources.
Ghana came second, so to speak, with attractive economics, business environment and trade and logistics, and average transport infrastructure and demographic and resources.
Ghana was seen as politically stable and was well-connected to its neighbours, while also offering a high level of education. Ghana’s public expenditure on education as a percentage of its GDP was the highest of all ten countries.
The DRC scored worst in the PwC study, with average demographics and resources, and unattractive economics, business environment, trade and logistics and transport infrastructure.
Looking ahead from 2012 to 2017, the situation in the DRC was not expected to improve significantly, despite average GDP growth of 8.6% – the highest of all ten countries.
Angola was forecast to record average GDP grow of 5.7% during this period, Ghana 5.9%, Kenya 6.2%, Mozambique 8%, Nigeria 6.8%, South Africa 3%, Algeria 3.6%, Egypt 3.5% and Tanzania 7%.
Shaw said Mozambique was a case in point of how inadequate infrastructure could stall growth.
“The country has massive reserves of coal and natural gas that can’t get out.”
Mozambique’s lack of infrastructure, and fast-deteriorating existing infrastructure, had forced landlocked countries, such as Zimbabwe, to rather move their goods through Tanzania or South Africa.
New oil fields in Kenya and Uganda, as well as growing agricultural exports, were expected to kick-start a new round of investments at East African ports.
Just over $50-million was to be invested in Kenya’s Mombasa port, and $400- to $500-million in Tanzania’s Dar es Salaam port.
Shaw said China was an important driver of infrastructure construction in Africa, in exchange for much-needed natural resources.
The DRC State copper company had, for example, signed a contract with China worth more than the DRC’s yearly budget.
Kenya’s $5-billion rail agreement linking Mombasa with Uganda was also driven by China, said Shaw.
While exporting and importing goods were important, he emphasised that Africa should do more to improve intra-Africa trade.
Only 11% of Africa’s trade was with African trading partners, compared with 50% between Asian countries.
This meant Africa’s road network had to improve.
Shaw said a roll-out of infrastructure to cater for mining, oil and gas projects should lead to a growing retail and agricultural sector, which had a different set of infrastructure demands, such as cold storage.
He named threats to the African business environment as corruption, strike action in South Africa, the continued Arab Spring up north, piracy on the East Coast, and regular floods in Angola and Mozambique.
There was also a lack of political will to collaborate.
“Whether moving resources off the continent or bringing goods and services into its burgeoning economies, Africa’s future growth and development will depend on the quality of its infrastructure and the efficiency of its transport networks,” noted PwC transportation and logistics global leader Klaus-Dieter Ruske.
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