Commodities not the only opportunity in Africa - opinion
18 May 2016 - by Staff reporter
In the face of growing international competition in sub-Saharan Africa, South African-based companies need to take a long-term strategic view of the region and how best to take advantage of the opportunities presented by the demographic, industrial and energy evolution that is taking place.
“Low commodity prices have tempered the desire of many companies to involve themselves in Africa, but this is arguably the best time for those with longer-term ambitions to integrate their operations into key development nodes,” says Duncan Bonnett, director at Africa House, an Africa-focused consultancy tailored to assist companies and governments develop their market entry strategies for sub-Saharan Africa.
“Many businesses think of countries or regions in Africa as single-driver opportunities which, when buoyant, offer great short-term opportunities, but when depressed, signal the time to leave. But sub-Saharan Africa’s mining and energy belts that were initial drivers of development have opened up support infrastructure opportunities that offer growth prospects in the longer term,” says Bonnett.
In Tete, Mozambique, for example, coal and infrastructure projects have slowed, but there are agri-industrial and support infrastructure opportunities. There is also a much broader regional, national and sub-national opportunity that is unfolding from Southern to East Africa, which is becoming an energy corridor.
Africa is urbanising at breakneck speeds, which means there’s a need for infrastructure such as bypasses, bridges and new highways while new technologies need to be deployed in congested areas where traditional methods cannot work.
This evolution of infrastructure and the underlying drivers will be highlighted at the Infrastructure Africa 2016 conference on 9 and 10 June at the Sandton Convention Centre.
“Companies need to develop a local presence and integrate their strategies with the evolving economies and underpinning infrastructure in the region. A local presence does more than wave a flag; it demonstrates commitment to the future, it allows for in-country intelligence gathering and goodwill (and ultimately contracts) from project developers and government,” comments Bonnett.