DHL Express Kenya Country Manager, Alan Cassels has encourage local businesses to capitalize on Africa’s increasing economic growth. The continent is currently home to 7 of the world’s 10 fastest growing economies, with the Ernst & Young 2014 Africa Attractiveness survey released last week revealing that Africa has now become the second-most attractive investment destination in the world.
Cassels says, “The rise of Africa has been well documented over the past decade and has now become one of the biggest frontiers for trade and investment.”
He adds that though the overall economic growth forecast for Africa is 5.4% according to IMF Regional Economic Outlook: Sub-Saharan Africa (SSA) April 2014, countries such as Rwanda and Siera Leone are expected to surpass that, with their growth projection at 7.5% and 13.9% respectively.
The 2014 Africa Attractiveness survey revealed that South Africa remained the largest destination for FDI (Foreign Direct Investment) projects, but countries such as Ghana, Nigeria, Kenya, Mozambique, Tanzania and Uganda have become more prominent on investor’s radars.
For example, FDI projects in Mozambique grew at a compound annual growth rate (CAGR) in excess of 30% since 2007. In 2013, Mozambique received 33 FDI projects, up 32% from the previous year.
Mr Cassels however adds that discussion of foreign investment often overlooks the real potential of Africa, namely its people and businesses. “Many local entrepreneurs and small and medium enterprises (SMEs) have so much to offer to their respective countries, both in terms of services and sustained economic growth.”
“As household expenditure has increased over the years, resulting in rising consumer demand, there is a definite opportunity for SMEs to fill the gaps which are not being serviced by large global companies. We have over 25,000 SMEs who work with us across Africa and every day we work on understanding their needs better and help them to go global,” he said.
He further reveals that DHL is doing its part to capitalize on the continent’s growing markets, having increased their retail presence in Sub Saharan Africa to just over 2600 outlets.
Despite all the positive outlook, Mr. Cassels says that infrastructure remains a big hindrance.
“With underdeveloped road and rail networks, and around 12% of cities served by just one flight per week, infrastructure and connectivity are among the most pressing challenges. Investments in infrastructure and our network remain a key focus area for us in 2014 as we understand that in order to achieve growth, we need to ensure that we have the best in class facilities. The ongoing upgrades to our network operations assist us in meeting these expectations while maintaining our excellent service standard”.
“Extensive infrastructure is critical for ensuring the effective functioning of an economy and a well-developed network is vital for enabling local and global business to transport their goods and services to the market securely and timely.” he adds.
DHL is a global network composed of more than 220 countries and territories and about 285,000 employees. It is part of Deutsche Post DHL, a Group that generated revenue of more than 55 billion euros in 2013.