While beleaguered by inadequate infrastructure and complex customs regulations, Africa’s emerging economy offered the greatest potential for growth and expansion in the freight and shipping market, said DHL Europe, the Middle East and Africa Global Forwarding CEO Thomas Nieszner.
“Although the emerging markets of China and India will continue to present good economics, we believe Africa is the continent that will be the company’s growth engine,” he told Engineering News Online on Wednesday.
The telecommunications, consumer goods, automotive and electronics industries were set to grow as the continent’s middle class expanded, which had already translated into increased demand for freight services.
“By 2015, an additional 250-million Africans would be able to afford, for example, a television, a home and health insurance, which will trigger considerable consumer movement, particularly around imports,” Nieszner noted, adding that he believed this justified the freight and logistics company’s investment in the continent.
Moreover, DHL Sub-Saharan Africa CEO Roger Olsson noted that, while alternate African hubs were emerging, such as Kenya in the east and Ghana and Nigeria in the west, South Africa was expected to remain the preferred gateway for intra- and intercontinental trade for at least the coming decade.
“South Africa’s economic growth for 2013 is still expected to be higher than that of Europe,” he said, adding that this growth rate had the potential to enter double-digits in the medium-term.
Critical to the leveraging of this potential, however, was intensified infrastructure development, particularly around transport.
The company noted that South Africa had demonstrated its intention to do so through initiatives such as government’s export strategy review, customs modernisation programme, as well as the National Development Plan, which prioritised transport upgrades and development.
As a result, DHL was positioning itself to exploit South Africa’s potentially improved export capability.
Olssen added that, while South Africa had lost some competitive continental advantage following recent cost increases and labour unrest, the company was confident it could recover.
DHL was currently expanding its capabilities in sub-Saharan Africa, with a strong focus on local compliance.
In addition, the company was in the process of developing a standardised internal information technology platform for its global forwarding business that would be rolled out in the next two years, and which it believed would improve logistical management.