Need for infrastructure investment

Against a background of robust growth on the continent, now is the time for selective and strategic investments, says Darlington Munhuwani, regional controller for Aon sub-Saharan Africa. “Governments have realised that they cannot go it alone and are actively courting foreign investors to take part in public private partnerships to mobilise the necessary capital for the development of the necessary infrastructure to link up the continent,” said Munhuwani. “And while the progress is slow, the fact of the matter is that something is being done to address the poor transport network.” Questions around the sustainability of Africa’s unprecedented growth can, however, not be left unanswered, he added. “I think we can still be cautiously optimistic about Africa,” said Munhuwani. “One always has to keep in mind possible shocks to the global economy and the adverse effect this could have on economies. In Africa the outbreak of the Ebola virus is of grave concern.” He said the costs associated with the outbreak of the virus already pointed to the vulnerability of some economies. “This does raise further questions around whether current growth rates will persist in the long-term,” he said. “But without a doubt there is a lot of opportunity in Africa at present.” The World Bank expects sub-Saharan African Gross Domestic Product (GDP) to double its size from around $1 trillion in 2010 to above $2 trillion in 2025. Several African countries such as Angola, Ethiopia and Mozambique are expected to grow relatively fast, averaging 7% annual growth over the period from 2010- 2025. “Another important fact to note is that despite faster growth rates in smaller countries, Nigeria and South Africa will continue to be the two largest economies in Africa,” said Munhuwani. For this reason Aon continues to develop new products and revamp traditional insurance products to suit the changing needs of its clients in Africa. “Insurance is not necessarily about the ‘bells and whistles’ but about the relevance of the cover to each client’s specific needs. As our clients expand into new territories where they face uncertainties about the local insurance regulations, it is important that we have ‘boots on the ground’ to acquaint them with the nuances of doing business in a particular country.” He said Aon had invested heavily in making sure they understood the state of each individual market and could give assurances that in the event of a claim their insurance covers would perform. “We have therefore invested in a network of offices across Africa so that we are able to leverage our local relationships with insurers and other important stakeholders for the benefit of all our clients.” INSERT $2 trillion Expected sub-Saharan Africa GDP in 2025 INSERT & CAPTION Insurance is not necessarily about the ‘bells and whistles’ but about the relevance of the cover to each client’s specific needs . – Darlington Munhuwani