Unlocking Economic Growth in Africa Through Improved Connectivity and Infrastructure

 Randy, when is that time to speak to us? How can you hear? Thank you, St. T. Arnold. Donnie, usually we do see some names that prop up every once in a while, you know, Mauritius, countries that I don't want to say correlation because at times it's the wrong word. But ease of doing business and logistics usually just go hand in hand. Donnie, any surprises this year, I'm not. Yeah, they certainly was a surprise. I think Mozambique came as a bit of a surprise, nobody was expecting it to show the improvement that it did. And I think that's quite important because connectedness is really important for countries to have economic growth and to have that fiscal security. So certainly, Mozambique was a very pleasant surprise to see over us. What it was and we could do, if we could just start there. What did they do? I think a lot has to do with all the drama that surrounded the transparency around the international loans. And I think now that that does the settle, people understand again the massive gas find that we have in the north of Mozambique. And what it actually means, it's often touted as the second largest gas find outside of Qatar, which certainly means that Mozambique becomes very attractive from an international investment perspective. It's quite interesting that this actually does go back to the huge find and ultimately, there will be a need to invest very heavily in the infrastructure to get the gas out. But Mauritius, how does Mauritius continue to do this? On the ease of doing business, that I understand, but logistics. How is Mauritius doing as well? Well, I think the key success in Mauritius is this has been a long-term plan and it's been supported by real active political will in that country. So if you look at the history of Mauritius over the last 10 years, you would see a steady rise in things such as the Connectedness Index, ease of doing business. They've done exceptionally well. They've done equally as well on the corruption index. So over time, Mauritius is just really kind of slowly but surely crept up on all of these really important graphs and indicators. Let's talk about the Africa Free Trade Area, the continental free trade area. Arguably, President Boca-Germi is the biggest achievement as the Chair President of the African Union last year. You do kind of allude to this in the report saying that this has the potential to improve intra-Africa trade by what, close to double. Tell me about the logistics front. Well, I think the two elements, if we look at the African trade agreement, I think what's important to understand is 49 countries are signed, but it's only been ratified by 22. So we still need two more countries to actually get this going. Why is that important? It's important because if we look at intra-Africa trade, that's quite low by international standards. We between 14 to 17%. You compare that to Europe, that's around 70. The Americas, it's around 50. So it goes to show that there's still enormous potential in Africa for that intra-regional trade. From a logistics perspective, of course, the more connected, the quicker the logistics, the better the prospects for economic growth. And that leads us to probably the last point, which is around the infrastructure in Africa. And that infrastructure is probably the most important part that we need to focus on from a regional perspective. The better the infrastructure, the quicker the logistics, the quicker the logistics, the better the injection from an economic growth perspective. It's quite interesting you actually put it like that because I was going through a particular paper that just summed up economics as production, consumption and distribution. And on one end, you're definitely making a case for the logistics side and the distribution, but just to walk me through another finding that is quite troubling, that shows that emerging markets are struggling as opposed to the developed markets. But if you look at the growth in my very humble understanding, you would think developed markets have been stagnant below 3% growth, well, until recently the US recovered. Emerging markets, on the other hand, you have a China that is saying growth is very slow, but it's at 6%. Walk me through the deviation here. I think it's all relative. If you look at the growth in Africa, you can argue that the top 10 fastest growing economies will be in Africa. What we've got to look at is we've got a dial at one step back and say, what is driving that growth? And an enormous part driving that growth is the investment and infrastructure. What we need to see is we need to see how do we promote that cross-border trade. If you look at goods being produced, only 20% of goods are actually making it across borders. If you then dial that back and you say that in Africa, in trade, it's only at around 14% to 17%. It just tells us how much potential the East will is. The key for us is two things in my opinion. The one is we have to diversify. We really have to start moving away from being so reliant on natural resources and certainly diversify into the SMEs. We've got an amazing SME market and potential in this continent. The key is to develop that and to help them going cross-border. There's an interesting statistic. If you look at Mexico and Brazil, for example, and if you look at their SMEs success, those that are trading cross-border is three times as successful as those that are just trading within the borders of their country. That's why we believe firmly from a DHL perspective that promoting cross-border trade with the SMEs will be one of those key enablers for economic growth beyond just natural resources in Africa. Finally, one thing that always troubles me is this particular, if I'm just to take you back to the example on Mozambique that you pointed out, there's always, I don't know if it's causality, but once there's a huge find, let's say the gas or something of the sorts in somewhere that's very rural, previously ignored, we could take the same example for Turkana in Kenya, up there in the North, ignored for quite a while, then oil is discovered, towel oil jumps in, and then suddenly rods have been constructed. Same thing for Uganda, the western part of the country, is this what we should come to accept in infrastructure development, it is only a byproduct of a huge massive discovery, usually in resources. I think on all for now, I think you quite right, we should accept that, I think why, because if you look at the financial state of the countries around Africa, what we need now is those massive finds that can help drive that investment in infrastructure and help drive the economies. So I think for now that is certainly what we will see, those infrastructure developments will certainly be akin or aligned to where the massive finds are, and from there one could only hope that downstream the benefits will continue to trickle through.

Mauritius scores high marks in the DHL Global Connectedness Index

In the recent released DHL Global Connectedness Index, in Sub- Saharan Africa, Mauritius was the highest ranking country which featured in 40th position.

Mauritius scores high marks in the DHL Global Connectedness Index

Related Videos

Trending Tokens

News Tips

Advertise With Us

Mauritius scores high marks in the DHL Global Connectedness Index

SIGN UP FOR OUR NEWSLETTER

DAILY UPDATE

Related Videos

Trending Tokens

News Tips

Advertise With Us

Newsletters