Money Moves News April 04, 2016 at 06:59 am

Shipping Giant DHL Promises to Keep Investing in Africa

Eric Ojo | Staff Writer, F2FA

Eric Ojo April 04, 2016 at 06:59 am

April 04, 2016 at 06:59 am | Money Moves, News

Employees process parcels at one of DHL's many locations in Africa. (Photo: appablog.wordpress.com)

DHL Express, a leading global brand in the logistics industry, has reiterated its resolve to make additional investments in Sub-Sahara Africa (SSA) irrespective of the region’s current economic indicators. The World Bank’s January 2016 Global Economic Prospects reported that Sub-Saharan Africa’s real Gross Domestic Product (GDP) grew at its lowest rate since 2009 in 2015 with a growth of a 3.4 percent. This was down from the 4.6 percent and 4.9 percent growth that was reported in 2014 and 2013 respectively.

Hennie Heymans, Managing Director of DHL Express Sub-Saharan Africa, noted that the company’s determination to continue to invest in the SSA region is premised on its firm belief that the African continent remains one of the last frontiers for growth, and that the region will continue to grow as it has over the past decade due to the vast number of unexploited opportunities available for local and foreign investors.

“The drop in GDP growth for the region over the past year shouldn’t deter investors. Africa will continue to thrive, albeit at a slightly slower pace as previously experienced”, he said.

Heymans added that reported growth had slowed globally in 2015, making it a tough year economically for Africa as well. Widespread drought caused by El Niño and a drop in demand for the continent’s commodities also contributed to the region’s challenges, resulting in falling prices, declining currencies, political instability.

“Despite this, the region remains abound with untapped prospects and offers growth opportunities in 2016 for those willing to seek them out,” said Heymans.

He added that based on DHL’s experience – the shipping giant employs more than 340,000 workers in more than 220 countries and territories worldwide – each country offers unique growth opportunities. Citing Ethiopia as an example, where the telecommunications sector is a large contributor to GDP, Heymans noted:

“the country had 40 million mobile subscribers and 10 million internet connections in 2015. However with a population of over 90 million, the sector has capacity to double its contribution to GDP.

In Mozambique, the retail sector is offering huge opportunities. With a growing middle class and shopping culture, coupled with a limited availability of common products, this sector offers opportune shities for both small and large businesses.

With Rwanda’s ambition to become a regional ICT (Information and Communications Technology) hub, there has also been a stronger demand for communication devices and ICT-related equipment. Similarly, we’ve seen an influx of medical supplies in the country with a booming healthcare sector.”

On the other hand, Heymans identified underdeveloped infrastructure and bureaucracy as twin factors obstructing economic growth and progress in many of the region’s countries. He points to the mining sector in Madagascar as one example:

“This could be a potentially lucrative opportunity for investors due to the country’s coal, nickel and ilmenite resources, however several legislative reforms are still needed. The opportunities are clearly there, it’s all about having a long-term, sustainable focus on the region.

“As we move into the second quarter of 2016, DHL Express will continue to invest in the SSA region, in our people and our network, with the ultimate goal of seeing Africa thriving” he declared.

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