Perception gap stymies Africa growth

As the only publication in South Africa to regularly visit neighbouring countries and to report in-depth on economic developments from a shipping and logistics perspective, FTW has alerted its readers to the opportunities on the continent. It is a message that is still not being heard outside of the industry we serve. Africa is still suffering from a “perception gap” that is preventing companies from identifying the opportunities on the continent, according to Ernst & Young researchers Mark Otty and AjienSita. The two managing partners are joint authors of the 2012 African Attractiveness Survey entitled “Building Bridges”. “Despite high optimism, high growth and high returns, the perception gap still exists and the African continent. There is clearly still work to be done by Africans – to better articulate and ‘sell’ the African growth story,” they say in their report. FTW’s own experiences on the continent support their statement. Companies – both private and parastatal – do not understand the importance and value of communication. Having worked in relative isolation for decades, they do not see the need to tell their story. This is a threat to the private companies, as new and more communication-savvy companies enter their market. At a parastatal level, ports are competing against each other. South Africa is no longer the de facto “gateway to Africa”. Savvy shippers and logistics companies are experimenting with new routes – and finding that they work. Local companies still have a (little) time on their side. The Ernst & Young survey of more than 500 investors and business leaders conducted in the compilation of the report “highlights the stubborn perception gap that continues to hamper efforts to attract investment into the continent,” say the authors. This year they decided to dig a bit deeper, and split the responses between those already doing business on the continent and those yet to make an investment. “The results are startling. Those already doing business on the continent were overwhelmingly positive, ranking Africa’s relative attractiveness above every other region except Asia (and even then, only marginally so). “In stark contrast, respondents with no business presence in Africa were overwhelmingly negative. They cited risk factors such as political instability, corruption and security as major obstacles. “This represents not so much a gap, as a chasm between perception and reality. “The facts tell a different story – one of reform, progress and growth,” say the authors. They point out that Africa’s economic output has almost tripled since 2003, and the IMF forecasts that seven of the 10 fastest-growing economies in the world over the next five years will be African. All of which means that the demand for transport will grow exponentially – and anyone involved in the logistics value chain should be ensuring that they have a solid African footprint. Logistics investment levels overall are not, however, reflecting urgency or awareness of the opportunities. According to Ernst & Young research, investments in logistics, distribution and transportation only made up three per cent of the new foreign direct investment projects between 2003, and 2011. CAPTION A mall in Accra Ghana ... high optimism, high growth, high returns.