Africa’s lack of efficient infrastructure is one of the highest hurdles to doing business in Africa, says Celeste Fauconnier, an economist at Rand Merchant Bank. She adds that it places significant strain on development, considering that the continent’s lack of efficient infrastructure cuts roughly 2.6% off its average percapita growth rate. Fauconnier, one of the speakers at the upcoming International Federation of Freight Forwarders Association (FIATA) world congress, taking place in Cape Town during the first week of October, says that while Africa’s available capital is not enough to meet its annual infrastructure needs, estimated at between $130 billion and $170 billion annually, there is opportunity in the situation. “This obstacle presents an opportunity to businesses involved in the development or financing of infrastructure projects,” she says. “Developing infrastructure is synonymous with developing Africa and has the potential to unlock enormous growth.” FIATA’s Logistics Academy chairman, Issa Baluch, sees Africa as a prominent destination thanks to its young citizens making up 70% of the population, which amounts to about 1.1 billion people. “Along with this, 60% of land which is arable globally is sitting in Africa, coupled with just 15% of water usage on the entire continent and an abundance of minerals – these are the main drivers for investments.” He adds that the continent has a lot to learn from countries in East Asia. “Countries that have placed logistics and freight at the top of their agenda include the UAE, Singapore, China and India. The right policies focusing on supporting this sector have greased the ‘wheel of commerce’ for inboundoutbound commerce. “Open-sky policies, singlewindow currency digitisation and freedom of movement of people, as well as cargo and currency, will bolster the economy on the continent.” According to Stephen Morris, acting directorgeneral of FIATA, securing investment will be critical to increase logistics and freight, forwarding capacity. “This is vital in order to build a solid infrastructure, while ensuring that industrialisation is inclusive and sustainable. The future of the continent, in terms of growth and economics, is dependent on this.”
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This obstacle presents an opportunity to businesses involved in the development or financing of infrastructure projects. – Celeste Fauconnier