‘Africa needs to move away from commodities’

The challenge for Africa in the years ahead will be to move away from commodities and into beneficiation. “If you look at how Africa has evolved from a trade point of view, a lot of it is centred around commodities,” says Safmarine’s Africa region executive Jonathan Horn. “It drives where trade and investment is happening. But the world needs to see Africa as more than just a source of commodities – and the responsibility is across all stakeholders. “Government and the private sector need to work together in moving to the next phase which is where we add value to our commodities. That creates employment, which results in increased levels of skills and education and increased wealth, which leads to increased consumption and ultimately more trade, and trade is good for shipping.” If you follow the oil and mining exploration trail, you will generally find there is a fair amount of infrastructure investment that goes with that, says Horn. “Companies that want to do business in Africa need to take a longer-term view. “They should not only be adding value to their shareholders but also to the communities in which they operate. It’s an important philosophy that needs to be recognised. “We have seen a huge appetite for commodities from the East and a lot of investment is coming with the ability to access these commodities.” Horn believes that investors from the East have embraced this philosophy and are taking a longer-term view of Africa not only as a vital source of commodities for themselves but as an important long-term market for their products. Their investment in infrastructure, he believes, is making a positive impact in a region where supply chain infrastructure is a challenge that needs to be addressed urgently in the short term. “It’s not only an African problem, and it’s not only about ports – but road, rail and supply chain infrastructure such as warehousing and depot facilities.” And from an African point of view, a more proactive approach is critical. “We tend to run into congestion problems and then catch up - the challenge for Africa is to advance these investments in supply chain infrastructure. “It helps importers and exporters and everyone who wants to invest. People want a reliable supply chain into and out of a country and the less predictable that is the higher the costs, largely because businesses are then ultimately forced to hold increased stock levels across the supply chain.” Clearly trade with the continent is not a smooth ride, but Horn is optimistic that once global markets achieve a period of stability, trade growth will continue to surpass global averages. “In volatile times you have to manage the things you can control. You have to monitor and scrutinise your cost base and where possible drive greater efficiencies without compromising delivery – and very importantly stay close to your customers and listen to them. “That’s the approach from a Safmarine point of view – sharing information with our customers and they with us so that together we make sure that we sail through these challenging times as best we possibly can.”