Africa has long been considered a continent with growth potential. Although this is the case, the question remains, is the continent developing at a sustainable rate?
Written by: Clive Smith, Chief Executive Officer, Tsebo Solutions Group
According to World Bank statistics, intra-African trade was at just 11% of the continent’s total trade between 2007 and 2011. In 2015, intra-African trade was worth just $170 million, when the potential stands at trillions of dollars .
While intra-African investment is critical to Africa’s future economic growth, it still remains significantly low despite the positive results it can yield. Intra-African trade fails because of volatile political climates and governance challenges in some countries. Potential trading partners cannot collaborate because of jurisdiction red tape.
Intra-African trade is essential so that African countries can do business with each other frequently in order to grow the economies of the continent and raise Africa’s global competitiveness. Recently, I attended the Africa CEO Forum, an event which seeks to find future solutions for the benefit of the continent’s development by bringing together governments and industry captains to engage on what is possible and intra-Africa trade was a topic in which many were interested and dominated the conversations in some of the sessions and hallways.
While Africa is often an overlooked investment target for many global multinationals as a result of infrastructure and policy challenges, it is upon businesses that are Africa born to reinvest in the continent. I have always believed in the opportunity that exists in Africa and that is the reason why we, at Tsebo Solutions Group have implemented a robust plan that has seen us build the business relationships we have on the continent. Although we believe that African economies will continue to grow despite the various market challenges, governments can catalyse easier trading practices to alleviate the burden of governance issues and border control challenges that many countries on the continent still face.
The World Bank forecasts growth of 3.2% for the year, up from 2.4% in 2017. It also predicted slightly higher growth for 2019 of 3.5% . This provides a window of opportunity for businesses to strengthen trade
relationships with counterparts on the continent to build sustainable trade. As an African business, we saw the need to focus on harnessing the power of doing business on the continent, not only to cement our footprint as a facilities management provider that understands Africans, but to support and strengthen the growth of the continent.
Intra-African investments are critical to Africa’s future economic growth as it creates greater opportunities to uplift the people of Africa as it has more of a direct impact on poverty by creating more job opportunities for the poor. Tsebo Solutions Group employs over 39 000 staff and more than 50% of the business’ turnover is fed back to our staff in wages. This has created a unique opportunity to not only grow our service delivery capabilities in Africa, but to uplift people across the continent.
However, it is important to note that expanding into Africa requires a deep understanding of the countries and their unique characteristics.
As a business, we believe that we can only reach our full growth potential by continuing with our Africa journey. With a customer base of nearly 1 billion people in Africa, the continent is set to grow only if African business continue to trade with each other and governments realise the importance of the private sector in opening growth opportunities.