It was reported earlier in the year by the International Monetary Fund that economic growth in Sub-Saharan Africa is expected to average 5.8% in 2013, an increase of 1% on last year. According to Hennie Heymans, MD of DHL Express South Africa, improving infrastructure and logistics in the region is key to achieving this growth.
He says that, according to an Ernst & Young report, the perception of Africa as a place to do business has improved over the past three years, and the number of foreign direct investment (FDI) projects in Africa grew 27% from 2010 to 2011.
“The increased interest in Sub-Saharan Africa, and specifically South Africa, is extremely positive, and will positively impact the economies in the region,” says Heymans.
He goes on to add that the BRICS summit, hosted in South Africa earlier in the year, highlighted fellow emerging markets’ interest in South Africa. He points to statistics released by Standard Bank, which showed that a decade ago trade with the BRICS economies accounted for just 5% of South Africa’s total trade with the world. In 2012, this figure stood at 19%. Last year, South Africa’s exports to its fellow BRICS economies increased by almost 17%.
Heymans says that as the attractiveness of South Africa is on the increase, the opportunities to expand into the region are also on the rise.
“These opportunities do however come with challenges, as the region faces various logistical as well as safety issues when it comes to transportation and logistics. In order to fully take advantage of these opportunities, we need to focus on improving infrastructure and logistics in the region,” he says.
Heymans says that other factors are also contributing positively to South African trade.
“According to the World Bank’s 2013 Edition of the Doing Business Report, South Africa is the most improved country in terms of facilitating trade, improving 30 places in the global rankings since 2012.”
“This ranking improvement has a strong positive impact on the domestic economy, but it will also generate positive spillover effects to the rest of Sub-Saharan Africa,” says Heymans.
He says that although Sub-Saharan Africa is growing faster than anywhere else in the world, and is home to six of the 10 fastest-growing economies in the world, the growth in Africa will never compare favourably with the growth China experienced, as many experts have predicted.
“Although Africa is growing at a rapid rate, it is definitely not the new Asia, and never will be,” he says.
“The continent will not experience overnight growth, as we do not have the people or the resources to rapidly transform. Africa is the next frontier, but the growth will be slow and steady, so investors and businesses shouldn’t expect instant success,” concludes Heymans.
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