Sub-Saharan Africa is expected to witness some level of growth despite a downturn recorded in the region in 2015.
According to a World Bank report in January 2016 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%.
Notwithstanding, the Managing Director of DHL Express for Sub-Saharan Africa, Hennie Heymans, says the African continent is still one of the last frontiers for growth, and that the region will continue to grow.
He explained that over the past decade, the vast number of unexploited opportunities available for local and foreign investors is an indication of room for development.
“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.
He was of the view that the region should not be assessed out of context since the growth figures reflected a general global trend.
He cited for example that the world recorded a drop in the demand for the continent’s commodities resulting in falling prices, declining currencies, political instability and the El Nino caused a widespread drought.
“However, despite this, the region remains abound with untapped prospects and offers growth opportunities in 2016 for those willing to seek them out,” he said.
Mr. Heymans’ assertion is also supported by Author and Acting Chief Economist at the World Bank Africa Region, Punam Chuhan-Pole, who asserts that Africa and Sub-Saharan African will see growth in the short term.
“The good news is that domestic demand generated by consumption, investment, and government spending will nudge economic growth upwards to 4.4 percent in 2016, and to 4.8 percent in 2017,” he stressed.
Mr. Chuhan-Pole also highlights that specific regions have higher growth prospects than others.
He pointed out that Cote d’Ivoire, Ethiopia, Mozambique, Rwanda and Tanzania were countries expected to sustain a growth of approximately 7% per year in 2015-17.
This was attributed to large-scale investment into energy and transport projects, consumer spending, and investment in the resource sector.
According to Heymans, based on DHL’s experience, each country offers unique growth opportunities.
“For example, in Ethiopia, the telecommunications sector is a large contributor to GDP. It was reported that 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”, he said.
He added that “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 opportunities for both small and large businesses.”
He was of the view that Rwanda’s ambition to become a regional ICT hub, could yield a stronger demand for communication devices and ICT-related equipment with signals of an influx of medical supplies already booming in the country’s healthcare sector.
Heymans maintained that more countries in the region could be thriving if not for underdeveloped infrastructure and bureaucracy.
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”, he said.
He added that “the opportunities are clearly there, it’s all about having a long-term, sustainable focus on the region”.He assured that as the company moves into the second quarter of 2016, DHL Express will continue to invest in the Sub Saharan region, with the ultimate goal of seeing Africa thriving.
Source:DHL Africa
